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Russia VAT Tax Follow

 

What is VAT?

VAT is the abbreviation of Value Added Tax and is in general due when goods and/or services are sold.

Who pays VAT?

In general, VAT is payable by the supplier of the goods and/or services to the Russian government. In certain situations specifically named in Russian VAT law cases, VAT is payable by the tax agents, e.g. if VATable supplies of goods (works, services) are performed by foreign entity not registered for tax purposes in Russia.

When VAT is paid?

Russian VAT generally applies to supply of goods (works, services) performed in Russia. If under specific Russian VAT place of supply rules supply is deemed as performed outside Russia, no VAT is applied.

Why should I pay VAT on purchased Zoom services?

Like many companies with a growing international presence, Zoom is routinely evaluating its indirect tax collection and remittance obligations. The application of these taxes to businesses with online activities is a complex and evolving area. Zoom continues to review such developments, as well as the nature and extent of its activities in different jurisdictions, and, based on such regular review, will from time to time start charging indirect taxes where applicable.

Is there any threshold for VAT on ESS?

There is no threshold for VAT on ESS supplied to Russian customers, i.e. all supplies of ESS to Russian customers (both business and individuals) are subject to Russian VAT.

How does Zoom identify the location of the customer for VAT purposes?

The Russian VAT law provides separate rules for identification of the place of activity for individuals and for business customers.

The place of activity of the individual (except for individual entrepreneur) is Russia if at least one of the below criteria refers to Russia:

(1) place of residence of the individual;
(2) place of location of a bank where a customer has a bank account used by the customer for payment for digital services or place of location of the operator of electronic money used by the customer for payment for digital services;
(3) IP address of the customer used for purchase of digital services;
(4) international country code indicated in the phone number used for purchase of or used for payment for digital services.

The business customer is considered as conducting its activity in Russia if it is a Russian legal entity having its legal address in Russia or if it is an individual entrepreneur with place of residence in Russia.

Are there any special exemptions applicable for charities under which VAT may not be charged?

No, VAT will be charged on all taxable supplies made to charities.

Does Zoom provide VAT exempt or non-VATable services?

All services currently provided by Zoom are subject to Russian VAT.

Is VAT charged by Zoom recoverable for the customer?

VAT charged on Zoom services should generally be recoverable for business customers provided the requirements for such recovery are met (i.e., services are purchased for VATable activity and properly booked into accounts, invoice issued by Zoom contains respective VAT amount, Zoom’s Russian TIN (Tax Identification Number) and CRR (Code of Reason of Registration)).

Are there any VAT obligations for me as a customer?

VAT amounts charged on Zoom services are collected from customers and paid to the Russian government by Zoom itself.