Russia planning to introduce 22% VAT for cross-border online trade, customs charge for parcels from overseas

MOSCOW. Sept 24 (Interfax) - The Russian Finance Ministry has prepared amendments to the Russian Tax Code as part of the budget process for 2027 and the subsequent two years, which stipulate a maximal 22% VAT rate for cross-border online trade, a decision which is "part of creating a competitive environment and 'legalizing' the economy", the ministry said in a statement.

"In order to even out trading conditions on the domestic market, the standard VAT rate for purchases of goods in electronic cross-border trade is to be set at 22% and paid by e-commerce platforms acting as agents," the press release reads.

The VAT rate for cross-border online trade has been under discussion in Russia for over a year. The option for amending the Russian Tax Code proposed previously by the Finance Ministry involved the gradual introduction of VAT for purchases on foreign marketplaces: 7% from 2027, 14% from 2028 and 22% from 2029. The Russian Industry and Trade Ministry insisted that the tax be introduced at the maximum rate straight away in order to create equal conditions for online marketplaces and traditional retailers.