The law on tax free took effect in Russia

16 Feb 2018
The law on tax free took effect in Russia

On January 1, 2018, the law on tax free took effect in Russia.

The tax free system provides for the return of VAT in case of removal of goods from Russia by the citizens of foreign countries (except the Eurasian Economic Union countries – Armenia, Belarus, Kazakhstan and Kyrgyzstan). The goods should be bought in the retail stores admitted to the tax free system by the Ministry of Industry and Trade.

A tax free check for VAT recovery should be issued by a retail store to a foreign citizen if within one day the latter purchases goods for at least RUB10 thousand (about USD170 or EUR140), VAT inclusive.

VAT recovery is not allowed for excisable items (such as alcoholic drinks, tobacco etc.). Other goods can be prohibited for tax free by a governmental decree.

The amount of tax to be recovered is the difference between VAT charged by a retail store and the fee for rendering service on VAT recovery (which is taxed at zero-rate).

Foreign citizens can apply for VAT recovery within one year from the day of goods acquisition on conditions that goods are exported within three months. The list of border crossing points authorized to perform tax free control shall be approved by the Government.

When crossing the border a foreign citizen shall produce exported goods, a tax free check and a passport used for entry to Russia. Money can be returned in cash in the airport or in cashless way, by sending a letter attached with tax free check stamped by the customs authorities to a shop.

For more information, contact Vitaly Sinitsin (This email address is being protected from spambots. You need JavaScript enabled to view it.) at Russian HLB member firm Energy Consulting. 

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For more information

Vitaly Sinitsin Vitaly Sinitsin

Tax and Legal Practice Director
Energy Consulting
Phone: +7 495 980 9081

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