Foreign companies providing electronic services to Russian customers have been required to register for VAT in Russia since 2017. A practical guide to…
Russia's digital services VAT obligation for foreign companies has been in force since 1 January 2017 — nearly a decade. Despite this, a significant number of foreign companies providing electronic services to Russian individual customers still have not registered. Some are unaware of the obligation. Some have assessed it and decided not to comply. Some registered initially but let their compliance lapse after 2022.
This article covers who is actually affected, what the registration and compliance process involves, and — critically — what to do if your company has been providing services to Russian customers without registering. The practical options for addressing historical non-compliance are more straightforward than many companies assume.
The obligation applies to foreign companies that provide electronic services to Russian customers — specifically to individuals (B2C). The company must register regardless of its size, regardless of whether it has any other Russian presence, and regardless of the volume of Russian revenue. There is no registration threshold.
The registration obligation applies only to B2C supplies — services to Russian individuals who are not VAT-registered businesses. For B2B supplies to Russian legal entities and individual entrepreneurs (sole traders), the Russian customer applies the reverse charge and you do not need to register.
In practice: if a Russian customer provides you with a Russian TIN (ИНН) and can be verified as a registered legal entity or individual entrepreneur, it is B2B — no VAT collection required. If the customer is an individual with no TIN, or does not provide one, it is B2C — you must charge and remit 22% VAT.
Many platforms and SaaS companies serve both individual and business customers in Russia. You cannot register only for B2C and ignore B2B — but you can manage the split by collecting TINs from business customers and treating others as B2C. Build the customer TIN collection into your onboarding or checkout process. The FTS expects this split to be documented — not assumed.
Once registered, the obligations are relatively light compared to a full Russian tax registration:
Quarterly VAT returns — one return per quarter, filed electronically through the portal. The return covers total Russian B2C revenue and VAT collected
VAT collection from Russian customers — charge 22% VAT on all B2C supplies to Russian individuals
Customer TIN collection — document which customers are B2B (exempt from your VAT collection) and retain this evidence
Invoices — issue invoices that show the Russian VAT amount where required by Russian customers
Notify of changes — notify the FTS of changes to company details, service types or cessation of Russian operations
You do not need to open a Russian bank account to comply with the digital services VAT regime. Payment via SWIFT to the FTS account is accepted. However, be aware that SWIFT transfers to Russian government accounts can be delayed or rejected by correspondent banks depending on their sanctions compliance policies. Working with a local representative who handles rouble payments is a more reliable approach for companies with recurring quarterly payment obligations.
This is the most important section for many companies reading this article. If you have been providing electronic services to Russian individuals since 2017 without registering, you have an accumulating VAT exposure. The practical question is: what are the consequences, and what can you do now?
The FTS has several tools for identifying foreign companies that should be registered but are not:
Russian customer complaints and FTS inspections — Russian individuals and businesses report payments to unregistered foreign providers
Bank transaction monitoring — incoming payments from Russian customers to foreign accounts are visible to Russian financial intelligence
App store and platform data — Apple App Store, Google Play and other platforms that collect Russian VAT on behalf of developers provide data to the FTS
Roskomnadzor coordination — internet regulators share data on foreign companies with Russian user bases
Self-reporting incentives — the FTS has been known to approach companies before initiating enforcement, offering an opportunity to register voluntarily
The FTS has limited direct enforcement tools against foreign companies with no Russian assets. However, enforcement options include: blocking access to Russian IP addresses (Roskomnadzor can block websites and apps), requiring Russian app stores and payment systems to withhold VAT on behalf of foreign providers, and pursuing claims through international cooperation channels. The blocking risk is real — several foreign services have had Russian access disrupted in connection with VAT non-compliance.
If your company has been providing electronic services to Russian customers without registering, the most practical approach in 2026 is voluntary registration and back-filing. The FTS generally treats voluntary disclosure more leniently than discovered non-compliance.
Practical support for international business in Russia.