Russia l Standard VAT Rate Hike to 20% in 2019

As of 1st January 2019, the Russian standard rate of VAT will increase to 20% from 18%.

The current VAT-inclusive standard rate of 15.25%, applicable to supplies of business-to-business (B2B) and business-to-consumer (B2C) electronically supplied services, will increase to 16.67%.

The new rates come into effect from 1st January 2019, notwithstanding the date of the contract. Consequently, it may be worthwhile for companies not able to deduct, to complete existing business arrangements before the end of the year so as to absorb the 18% rate of VAT this year instead of the 20% rate in 2019.

The reduced Russian VAT rate of 10%, which applies to specified goods and services, including basic foodstuffs, medicines, children’s clothes and periodicals, remains unchanged.

If you believe you are affected by the above changes or if you have any questions, please do get in touch.