VAT Registration for Foreign Electronic

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:

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:

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.

If a foreign company discovers it should have registered for electronic-services VAT years ago and did not, the instinct is often to wait and hope the gap is never noticed. That is usually the wrong call — the exposure compounds while it sits, and coming forward on your own terms is almost always better than being found.

The voluntary regularisation approach means quantifying and closing the historic gap proactively rather than waiting for the FTS to raise it. It runs in three broad steps:

The reason to do this proactively is that a voluntary, documented approach — where you identify the gap, quantify it and come forward — is generally treated more favourably than an assessment that the FTS raises after finding the omission itself. The gap does not improve with age: interest and penalties accrue, and the longer the non-compliance runs, the larger the eventual settlement.

There is one important prior question. Before regularising, confirm that you were actually caught by the obligation. Since the October 2022 change, a provider selling only to Russian businesses (B2B) generally does not register, because the Russian buyer accounts for the VAT. If your sales were B2B-only, you may owe nothing — which is exactly why establishing your B2C/B2B position is the first move, before you regularise something you did not owe.