VAT for a foreign-owned trading business turns on registering, charging and recovering correctly — with the new 22% rate from 2026. Whether you're doing all three right in your specific setup decides whether VAT is a pass-through or a leak.
Your model requires it — you're making taxable supplies that need a Russian VAT registration, at the new 22% rate for most goods.
Applying the right rate, filing correctly each period, and structuring input VAT for recovery so it doesn't quietly become a cost.
VAT is one of the two taxes a foreign-owned trading business in Russia deals with most (the other being corporate income tax). Getting the rate, registration and recovery right keeps VAT a pass-through rather than a cost. This guide covers the essentials as they apply to foreign companies.
From 2026 the standard VAT rate is 22% (raised from 20%). A reduced 10% rate applies to certain foods, children's goods, medicines and printed matter, and a 0% rate applies to exports and qualifying international transport. The rate that applies depends on what you sell.
Standard rate: 22% (from 2026)
Reduced rate: 10% (essentials)
Zero rate: 0% (exports, qualifying international transport)
A Russian company is within the VAT system by default and files VAT returns quarterly, by the 25th of the month following the quarter, paying in three instalments. Certain small businesses on special regimes may fall outside standard VAT, but most foreign-owned trading entities are fully within it.
VAT you pay on business purchases and on imports — input VAT — is generally recoverable against the VAT you charge on sales, provided the documentation is correct and timed properly. For importers, import VAT is recoverable by a VAT-registered company, which is why registration and clean paperwork matter for cash flow.
Pick your situation — we'll tell you where you stand:
The usual problems are documentation (invoices that don't support recovery), timing (claiming in the wrong period), and treatment of cross-border and digital services, which have specific rules. For foreign-owned businesses, aligning VAT with customs on imports is where value leaks if the two are handled separately.
We handle VAT registration, quarterly returns, input-VAT recovery and the import-VAT interaction, so VAT stays a flow-through rather than quietly becoming an expense. Where digital or cross-border services are involved, we confirm the correct treatment up front.
The standard rate is 22% from 2026 (up from 20%). A 10% reduced rate applies to certain essentials and a 0% rate to exports and qualifying international transport.
Quarterly — by the 25th of the month following the quarter — with payment in three equal instalments by the 28th of each of the next three months.
Yes. Input VAT on business purchases and imports is generally recoverable against output VAT for a VAT-registered company, provided the documentation is correct and claimed in the right period.
This covers how VAT works for a foreign-owned trading business — the new 22% rate, registration, recovery. Your question is whether you're registering, charging and recovering correctly in your specific setup, so VAT is a pass-through rather than a leak.
Trading in Russia and dealing with VAT? Getting registration and recovery right keeps VAT a wash instead of a leak.
Practical support for international business in Russia.