The Federal law № 244-FZ “On amending parts one and two of the Tax code of the Russian Federation” (hereinafter – the Law) came into force on 01 January 2017. The Law provides that starting from this date provision of services in electronic form by foreign IT-organizations to Russian individuals and legal entities in Russia is subject to VAT taxation.
Under clause 1 art. 174.2 of the Russian Tax code as amended by the Law the following services are subject to the payment of VAT inter alia:
- granting of rights to use computer programs (including computer games), databases via the Internet;
- provision of advertising services on the Internet;
- services on placing offers for purchase (disposal) of goods (works, services), property rights on the Internet;