Skip links

Russia local rep office and VAT obligations for foreign digital businesses

From 1 July 2021, Russia has imposed obligations to establish a Russian representative office on non-resident websites, marketplaces, payment providers and data processors. This will trigger local Russian Value Added Tax and other tax obligations. Many obligations are delayed until 1 January 2022, and penalties start 1 September 2022.

Which foreign e-commerce and data companies effected

Any non-resident with over half a million Russian resident users in the following sectors are affected:

  • IT (ecommerce, data) companies targeting Russian users and paying customers
  • Website with Russian language advertising
  • Payment processors for Russian (businesses and individuals)
  • Hosting companies with Russian site users
  • Digital advertising service companies with Russian-targeted services
  • Russian user data processing services

Russian obligations for digital companies

For qualifying businesses, Russia now expects the following corporate and tax compliance:

  • Establish a subsidiary, branch or local representative office (effective 1 January 2022)
  • Open real-time live communications account for the Russian authorities to communicate with company operators

 

Cease to use the simplified Russian VAT on digital services compliance service, and register as a local company/rep office.

Leave a comment