Why new VAT rules are important for international
companies
According to the Federal Law of 27 November 2017 No. 335-FZ,
starting from 2019 foreign companies providing electronic services
to Russian companies (i.e. B2B services) must register with the tax
authorities in Russia and pay VAT. These amendments were adopted
despite the fact that tax registration of foreign companies
providing electronic B2B services was not recommended by the OECD
(under the OECD recommendations, only foreign companies rendering
electronic services to individuals should be subject to tax
registration).
Russian companies purchasing electronic services from foreign
companies should not withhold VAT. They have the right to deduct
the input VAT charged by the foreign company based on an agreement
or a payment document showing the VAT amount and the Taxpayer
Identification Number (INN) and the Code of Reason for Tax
Registration (KPP) of the foreign company, as well as documents
confirming
