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.