Value added tax (VAT)
was first introduced in Russia
in 1992 and it is now established at the standard rate of 18%
. Companies with operations in Russia
, regardless if they are local or foreign, are required to register for taxation
(including VAT) and to pay for VAT
in accordance with the stipulations of the local legislation. Businessmen should know that several industries are taxed at a lower VAT
and that other industries can be exempted from this tax; our Russian company formation agents
can provide you with more information on the local VAT rates
Characteristics of the Russian VAT
Foreign investors conducting business operations in Russia
have to register for VAT
, but it is important to know that the Russian legislation
does not require a separate VAT registration
, as this process is incorporated in the general tax registration.
As a general rule, the standard VAT is established at the rate of 18% for most of the products and services provided on the Russian market; property rights and various types of works are also taxed at the standard rate.
The lower tax rate, applicable at 10%, is provided for several types of products; in this category are included the following:
• basic foodstuff;
• clothes for children;
• medical products;
• printed products.
Imports and exports VAT in Russia
Entrepreneurs with activities in the field of trading
should know that the imports of goods
are taxed at the rate of 10%. Exports from Russia
are not subjected to VAT
, as well as other export related activities, on which our Russian company formation agents
can provide you with more details.
International transportation, for goods or persons, is also exempted from paying VAT.
Goods and services exempt from paying VAT in Russia
There are several industries which are not subjected to paying the VAT, a measure which encourages the financial development of the local market.
Banking and insurance services are not required to register for VAT; the same rule is applicable for financial institutions or educational services.
Passenger transportation is also a domain for which businesses are not subjected to VAT. The legislation is available for certain medical products.