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Russian government proposed to increase VAT rate to 20%

15.06.2018

Russia VAT rate is very likely to rise from 18% to 20% starting from 2019. Respective draft law has been introduced by Russian Government on June 15, 2018. First reading by the State Duma will take place on July 3, 2018.

There will be no change to the reduced VAT rate of 10% on number of foodstuffs, goods for children, medicines, books and periodicals.

The following compensatory measures are introduced in parallel with the rise of VAT rate:

  • reduction of threshold for accelerated VAT refund to exporters. Currently only companies, which paid not less than 7 bln. roubles in taxes for the last three years may enjoy accelerated VAT refund; this figure will be decreased to 2 bln. roubles;
  • reduction of 3-months period of carrying out desk audit at the VAT refund;
  • abolition of tax on movable property.

If you want to know more about VAT regulations, please refer to Doing business in Russia or contact us.