Russia’s Federal Tax Service issued Letter No. 16-18/081555, clarifying VAT obligations for digital services provided by non-residents to Russian entities.
The letter states that when digital services such as rights to images, music, and video are purchased by Russian entities, Russia is considered the place of supply, and VAT must be applied. The Russian buyer is responsible for calculating and paying the VAT.
Additionally, the letter touches on VAT rules for services exchanged within the Eurasian Economic Union (EAEU). According to the 2022 protocol of the 2024 EAEU treaty, if an individual in another EAEU country receives the services, the supplier must register and pay VAT in that country.
For legal entities or individual entrepreneurs, the supplier must register only if required by local laws; otherwise, VAT is handled by the recipient under the reverse charge mechanism.
