EAEU transitioning to collect VAT on online trade in country of consumer possible no sooner than January 1, 2024 - Deputy PM Overchuk

MOSCOW. Oct 24 (Interfax) - Member countries of the Eurasian Economic Union (EAEU) will be able to adopt amendments to the draft protocol on amending the agreement on the EAEU regarding the procedure for levying indirect taxes on e-commerce in goods sold to individuals no sooner than spring 2023, Russian Deputy Prime Minister Alexei Overchuk told Interfax.

"While the member states of the EAEU have reached an agreement that the current law of the union, according to which VAT is paid in the country where the e-platform is located when conducting e-commerce, should be brought in line with generally accepted global practice. Meaning that VAT will be paid not in the country where the e-platform is located, but in the country of destination, that is, where the consumer of the goods is located. Thus, amendments to the EAEU law are required, and this is a process in itself, including developing and approving amendments to a large contract, signing the amendments to the contract and their ratification. Meantime, each EAEU member state acts in accordance with its own interests and internal rules," Overchuk said when describing the process for formalizing the agreements already reached by the EAEU countries.

"Usually, even with good will, it all takes months. The amendments should not be expected before the spring of 2023, and entered into force as planned as of January 1, 2024," the deputy prime minister said.

Overchuk recalled that, "a number of EAEU countries have unilaterally agreed to introduce the principle of the country of destination into their national legislation before amending the law of the EAEU."

"As a result of the simultaneous application of national legislation and the law of the EAEU in implementing cross-border transactions in e-commerce, double taxation has begun to arise. The solution may be to propose appropriate amendments to the Russian Tax Code, which could come into force from 2023, but this also requires analysis," Overchuk said.