Tax-free shopping to be introduced in Russia
- Author: Dmitry Churin
- Date: 06.05.2016
Russian First Deputy Prime Minister Igor Shuvalov instructed government agencies to prepare measures to implement tax-free shopping in Russia.
It follows from Parliament meeting minutes that testing of a system may start already this year. There are two companies negotiating to obtain the status of tax-free operators in the country: Global Blue и Premier Tax Free (Fintrax). The threshold on the value of goods purchased in Russia by a non-resident that would qualify for a VAT refund is proposed to be set as RUB 10,000 (approx. EUR 150).
If the experiment proves to be successful, the retailer wishing to offer tax-free shopping shall comply with the following criteria:
- a turnover of at least RUB 100 million (approx. EUR 150,000);
- no tax debts;
- there is an international airport in a city of a shopping location.
Currently Russian legislation does not provide tax-free shopping options. The standard VAT rate in Russia is 18%.
It shall be noted that there were proposals to introduce a tax-free shopping system in Russia in 2012 and 2013. However, none of them were implemented.
Should any questions arise in connection with the above or if you need any additional materials, please contact Dmitry Churin or Elena Lepneva, St. Petersburg Office of Capital Legal Services.
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