VAT in Russia for Foreign Companies

A complete guide to VAT in Russia for foreign companies — the new 22% rate from January 2026, registration requirements, digital services VAT, B2B vs B2C…

Russian VAT (НДС — Налог на добавленную стоимость) applies to foreign companies in several different ways depending on how they engage with the Russian market. A foreign company selling goods into Russia, supplying digital services to Russian customers, or operating through a Russian entity each faces different obligations — and different compliance risks.

This guide covers the four main VAT scenarios for foreign companies, the new 22% rate and what it means in practice, the digital services regime, registration and filing requirements, and input VAT recovery.

VAT rates in Russia from January 2026

The 2% increase from 20% to 22% applies to all standard-rated supplies from 1 January 2026. For foreign companies with Russian VAT obligations, this requires updating pricing, contracts, invoices and accounting systems. Transition rules apply to supplies straddling the year-end — the rate applicable is determined by the date of the taxable event (delivery of goods, completion of services) not the invoice date.

Where a contract was signed before 1 January 2026 at a 20% VAT rate and the supply occurs in 2026, the 22% rate applies. The additional 2% is generally the supplier's cost unless the contract explicitly provides for VAT to be charged at the rate in force at the time of supply. For long-term contracts, review and amend VAT clauses to avoid absorbing the 2% increase.

Four VAT scenarios for foreign companies

Digital services VAT — the foreign company regime

Russia introduced VAT obligations for foreign digital service providers in January 2017 (Federal Law 244-FZ), one of the first countries globally to do so. The regime has been updated several times since. As of 2026, the following rules apply:

What counts as electronic services

B2C — direct registration required

Where a foreign company supplies electronic services directly to Russian individuals (not businesses), it must register with the FTS and charge, collect and remit 22% VAT. Registration is done online through the FTS portal "VAT Office for Online Service Providers" — in English and Russian. No Russian representative is required, though some companies appoint one for practical reasons.

B2B — reverse charge from 2019

Where a foreign company supplies electronic services to a Russian VAT-registered business, the Russian business applies the reverse charge. From 1 January 2019, Russian businesses must self-assess VAT on all inbound B2B digital services from foreign providers — the foreign company does not need to register or charge VAT on these supplies. The Russian customer reports and pays the VAT and claims it back as input VAT.

The distinction matters because it determines whether you or your Russian customer handles the VAT. A B2B customer is a Russian legal entity or individual entrepreneur (sole trader) registered for VAT. B2C customers are unregistered individuals. In practice: if your customer provides a Russian TIN (ИНН) and is registered as a legal entity or individual entrepreneur, it is B2B — the reverse charge applies. If no TIN is provided or the customer is an individual, it is B2C — you must register and charge VAT.

Place of supply rules

Russia is the place of supply — and therefore Russian VAT applies — for the following:

VAT registration for foreign companies

Standard VAT registration (through a Russian entity)

A foreign company that establishes a Russian LLC or branch is automatically registered as a taxpayer and becomes a VAT payer. No separate VAT registration is required — the registration certificate and TIN received on entity registration cover all Russian taxes including VAT. VAT returns are filed quarterly by the Russian entity.

Simplified digital services registration

For foreign digital service providers without a Russian entity, registration is done online through the FTS portal. The process: