Intellectual property means the rights or license for copyrights, trademarks and patents to apply. According to the Federal Tax Service, the sales for Intellectual Property (IP) by a foreign company to a Russian company for apply outside of Russia falls outside of the possibility of Russian VAT. The Russian tax authorities established that IP rights’ transactions come under the rules of place of supply of services. This rule supports the EU VAT Directive rules, which deems that IP exploitation is a condition of a service and is taxable in customer’s location. The reverse charge may be applied to companies whether this is in another EU country and if it is outside of the EU, then it is outside the scope of VAT.