Russia plans introducing VAT for foreign sellers
The Russian Finance Ministry plans to impose value added tax (VAT) on imported goods purchased by individuals through online trading platforms starting in 2027. The Ministry published the text of the relevant draft law for public discussion on 2 October.
The proposed Tax Code amendments suggest that VAT will be set at 5% in 2027 and will be gradually increased to 10% in 2028, 15% in 2029, and 20% in 2030. The tax will have to be paid by foreign sellers and Russian marketplaces selling products from abroad. Where the value of the goods is stated in foreign currency, it will be converted into roubles at the average exchange rate of the Bank of Russia for the tax period in which the return is filed.
In this case, marketplaces will be given the function of tax agent, so that the tax will be paid through these platforms, the document says.
VAT will have to be paid regardless of whether the value of the foreign goods exceeds the duty-free threshold in the Eurasian Economic Union (EAEU). Currently this threshold is €200, but starting in 2026 it is planned to reduce it to €100, then to €50 in 2027, and to €0 in 2030.
The Finance Ministry explained that the amendments are due to amendments to the agreement on the Customs Code of the EAEU adopted in 2023, which has been ratified by all member states of the Union. As the ministry says, the development of e-commerce has led to the emergence of trading platforms on the territory of the EAEU countries that are comparable in sales volume to large retail chains, while the way in which these trade channels are regulated is significantly different. "There are no obligations for online marketplaces to ensure quality control of goods. Cross-border e-commerce also has a number of other competitive advantages, chief of which is the option not to pay VAT," the ministry said in a statement.
The measure will make the tax burden on all sales channels fair, creating equal business conditions for traditional importers and cross-border suppliers, according to experts interviewed by RBC. In recent years, cross-border trade has become a full-fledged sales channel in Russia. "Trading networks as importers pay all duties and VAT, which does not apply to online platforms. The difference in the tax burden gives marketplaces a significant price advantage over other retail players, and the introduction of VAT will spread the fiscal burden evenly for all retail market participants, which will promote fair competition. A smooth, gradual rate increase will allow businesses to adapt and prevent sharp price increases for consumers," said Stanislav Bogdanov, Chairman of the Presidium of the Association of Retail Trade Companies (ACORT).