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Federal Tax Service issued a guidance letter on VAT on ESS


On April 25, 2019 the Federal Tax Service issued guidance letter No. SD-4-3/7937@ “On Application of VAT within Provision of Services in Electronic Form as of January 1, 2019” (the “Letter”).     

The Letter is intended to relax the Russian VAT rules for foreign suppliers of electronic services by "allowing" Russian B2B customers to act as tax agents and claim VAT so withheld for recovery.  

The Letter appeared as a result of multiple efforts and proactive approach of the whole business community aimed at mitigating the negative impact of the 2019 VAT regime on B2B electronic services. 
The Association of European Businesses and its Taxation Committee in particular welcomes  further cooperation with the Federal Tax on possible amendments to the Tax Code of the Russian Federation in order to resolve existing issues at the legislative level.