The Federal Tax Service of Russia
Published: 01.08.2016 13:19
Starting with January 1, 2017 non-Russian providers of cross-border online services to customers in Russia will be required to register as taxpayers with the Federal Tax Service of Russian. This requirement is established by the Federal Law which became effective on July 3, 2016. The purpose of new legislation is to create a level playing field for Russian and foreign companies doing business in the Russian Federation.
Online services covered by the new legislation include provision of rights to use computer software via Internet, including video games and data bases. This definition also covers advertising in the Internet, placing of ads, supporting and maintaining electronic resources, downloading of e-books, music, video and other services.
According to the internationally applied principles and practices the cross-border online services are taxed in the territory of the state where the consumer is located (i.e. in the destination country). The Federal Law of July 3, 2016 № 244-FZ On Amending parts 1 and 2 of the Russian Federation Tax Code establishes similar rules with regard to such activities in Russia by introducing the definition of online services and setting the list of such services as well as implementing the destination principle for taxing purposes.
Communication between the FTS of Russia and the non-Russian suppliers of online services will be carried out through the FTS web portal. To register with tax authorities in Russia it is required to provide company’s details and information about the services it provides or plans to provide to customers in Russia by filing an online form. This form would serve as a basis for tax registration and assigning a Taxpayer Individual Number (TIN) as well as granting access to the Online Personal Account for Online Service Providers which will be a point of contact for all further communications including filing a tax return and mailing of documents.
To improve taxpayer services the FTS has set up a special platform at its official web portal to facilitate discussion on issues of new VAT rules for non-Russian providers of online services to customers in Russia. Taxpayers’ views are important for us and we welcome your participation.