Input VAT recovery for export of services – approved by the State Duma

05 April, 2019

The State Duma approved amendments to the Russian Tax Code (RTC) which introduce the right for input VAT recovery in relation to export of many types of services. This is generally in line with the VAT principles in many other countries. For example, input VAT recovery becomes available in connection with software development services, consulting, legal, marketing and a number of other services rendered to foreign customers.

However, the new provisions will not cover export of VAT exempt services listed in Article 149 of the RTC. For example, taxpayers that transfer / license the rights to software products, inventions, know-how and certain other IP objects to foreign customers, or render certain research and development (R&D) services to foreign customers, will still be not entitled to recover input VAT.

If by the end of May 2019 the bill is approved by the Federal Council and by the President and published, the new rules will take effect 1 July 2019.

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Yana Zoloeva

Partner, Russia Tax and Legal Leader, PwC Russia

Tel: +7 (495) 967 6000 (ext.5221)

Valeria Efremova

Senior Tax Manager, PwC Russia

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