Russian VAT for foreign companies — registration, returns and digital services.
VAT is where foreign businesses in Russia most often discover an obligation they did not know they had. We establish whether you must register, complete the registration, file the returns and keep the position defensible — including the digital-services regime that catches software, SaaS and online platforms selling to Russian customers.
VAT is the tax that most often surprises foreign businesses in Russia — not because the rules are obscure, but because the obligation can arise without a Russian entity, a Russian office or a single employee in the country. The standard rate rose to 22% from 1 January 2026, and the registration triggers, the filing mechanics and the recovery rules each work differently depending on what you sell and who you sell it to. Getting the analysis right at the start is considerably cheaper than correcting it after the Federal Tax Service asks.
The first question is always whether you need to register at all. For most cross-border business-to-business supplies, you do not: the Russian customer accounts for the VAT itself under the reverse-charge mechanism, acting as your tax agent. This changed materially in October 2022, and a great deal of the guidance still circulating online predates it. Where the obligation does bite is business-to-consumer — a foreign company supplying electronic services directly to Russian individuals must register with the FTS in its own name, file quarterly and pay in roubles. Software vendors, SaaS platforms, marketplaces and app developers routinely fall inside this regime without realising it.
B2B cross-border supplies: the Russian customer accounts for the VAT under reverse charge, acting as your tax agent.
B2C electronic services: a foreign company supplying Russian individuals must register with the FTS in its own name, file quarterly and pay in roubles.
Guidance published before October 2022 predates the change and still circulates — check the date before relying on it.
The second question is what your VAT position actually looks like once you are inside the system. Foreign-owned Russian entities deal with the full domestic regime: quarterly returns, electronic invoicing, input VAT recovery, and the documentation that supports it. Recovery in particular rewards discipline — a claim that is well papered from the first quarter is straightforward, and one reconstructed two years later under audit rarely is. We build the position so it holds up rather than so it merely files.
The third question, and the uncomfortable one, is what to do if the obligation has already been running unaddressed. Registering late, filing back returns and disclosing voluntarily is almost always a better outcome than waiting to be found — penalties and interest are calculable, and the FTS treats a self-corrected position very differently from one it uncovers. We have handled this often enough to say plainly that the exposure is usually more manageable than the client fears, and that the delay in facing it is what makes it expensive.
We work the whole cycle as one engagement: exposure assessment, registration where it is required, the quarterly rhythm, recovery, and defence if the position is ever questioned. Our advisers trained at the Big Four and work in English, Russian, Chinese and Turkish, which matters when the answer has to be explained to a head office that has never dealt with the Russian tax authority.
A structured review of your supplies, customers and contracts against the Russian registration triggers, delivered as a written position you can hand to your head office or your auditor.
Registration of a foreign company with the Federal Tax Service under the electronic services regime — application, supporting documents, taxpayer account and the first filing cycle set up correctly.
The electronic services regime for software, SaaS, marketplaces, apps and online platforms selling to Russian customers — including where the platform, rather than the vendor, carries the obligation.
Quarterly VAT returns for foreign-owned Russian entities and registered foreign companies — prepared, reconciled and filed on the statutory calendar, with head-office reporting alongside.
Input VAT recovery and refund claims built on documentation that survives review — and an honest view up front of which claims are worth running.
Late registration, back returns and voluntary disclosure — the exposure quantified first, then corrected in the order that minimises penalties.
You sell software or SaaS to Russian customers and have just been asked for a Russian VAT number.
Your Russian subsidiary has been filing VAT returns, but nobody has reconciled input VAT recovery to the accounts.
A Russian customer is withholding VAT as your tax agent and you are not sure they should be.
You have been supplying Russian consumers for two years and have never registered.
A refund claim has been sitting with the FTS and the queries are getting harder to answer.
The company had sold subscriptions to Russian consumers since 2021 and assumed its Cyprus entity placed it outside the regime. It did not. We quantified the historic exposure, registered the company with the FTS, filed the back returns and disclosed voluntarily. The final settlement came in materially below the head office's provision, and the company now files quarterly on a fixed fee.
We map what you supply and to whom, and establish whether a registration obligation exists at all.
Where it is required, we register you with the FTS and set up the taxpayer account and payment mechanics.
Returns prepared, reconciled and filed on the statutory calendar, with reporting your head office can read.
Input VAT claimed on documentation that holds, and the position defended if the FTS queries it.
It depends on who your customers are. Since October 2022, foreign companies supplying business customers in Russia generally do not register — the Russian customer accounts for the VAT under the reverse-charge mechanism as your tax agent. Foreign companies supplying electronic services directly to Russian individuals do have to register with the Federal Tax Service, file quarterly and pay in roubles. A great deal of guidance still online predates the 2022 change and will tell you otherwise.
The standard rate is 22% from 1 January 2026, raised from 20%. Reduced and zero rates apply to specific categories, and the applicable rate is not always obvious for cross-border supplies — place of supply has to be established first.
Broadly: software supplied over the internet, SaaS and cloud services, access to databases, advertising and marketplace services, streaming media, hosting, domain services and online platforms. The definition is drawn widely and catches many businesses that do not think of themselves as digital service providers.
Register, file the back returns and disclose voluntarily. The exposure is calculable — VAT, penalties and interest — and in our experience it is usually more manageable than clients fear. What makes it expensive is waiting: the FTS treats a self-corrected position materially better than one it discovers itself, and the interest keeps running either way.
A foreign company registered only under the electronic services regime generally cannot recover input VAT. A Russian entity — including a foreign-owned one — can, provided the documentation supports the claim. This is one of the practical arguments for a local entity rather than direct registration, and it is worth weighing before you choose a structure.
The exposure assessment is a short engagement — usually a week or two, depending on how many supply types and contracts are involved. If you want a rough read before committing to anything, our VAT exposure check is free and takes a few minutes.
By email, WhatsApp, Telegram or WeChat. Describe your situation briefly — we don’t need everything upfront.
A named adviser replies — not a generic inbox. We confirm whether we can help and propose a call if needed.
We ask about your situation, Russian entity structure and what you need. No charge. In English, Russian or Chinese.
Clear scope, fee and timeline. We start on receipt of the signed letter. No retainer lock-in on project work.
Practical support for international business in Russia.