The chairman of the Federal Inland Revenue Service (FIRS) in Negeria confirmed the introduction of a 5% withholding value added tax on all e-commerce goods and service transactions…
The chairman of the Federal Inland Revenue Service (FIRS) confirmed the introduction of a 5% withholding value added tax on all e-commerce goods and service transactions.
The chairman did not give an official date for its introduction but did state that when introduced, it would be charged and collected via banks and credit card companies in the country; this is instead of suppliers. It would also apply to both resident and non-resident providers of these types of goods and services.
It is thought that this tax would be levied when the sale is made from the online marketplaces (such as Amazon, eBay, Facebook and Instagram, for example).
From 1 January 2019, Russia has amended its current VAT legislation to state that non-resident businesses selling digital services to businesses in Russia have to VAT register and charge VAT on their supplies.
However, the Russian tax authorities have now confirmed that the business customers in the transaction can withhold the VAT payments and submit this to the tax authorities directly. This will mean that the supplier will not need to receive and remit the VAT payments to the tax authorities, but they must still remain VAT registered and submit VAT returns.
This VAT treatment applies to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.