VAT on exports

Exports of goods from Russia are subject to VAT at a zero rate (Article 164(1)(1) of the Russian Tax Code). No tax on export proceeds is paid to the budget. Input VAT paid to suppliers when buying goods for export can be deducted and reclaimed from the budget.

How to confirm the zero rate

The rate must be confirmed with documents under Article 165 of the Russian Tax Code:

• the contract with the foreign buyer;
• the customs declaration with the customs mark confirming that the goods were exported;
• transport and shipping documents.

The documents must be collected within the period set by the Tax Code. If the package is not ready in time, the export is subject to VAT at the standard rate. Once the documents are collected, this tax can be reclaimed.

For exports to countries of the Eurasian Economic Union (EAEU), there is no customs clearance at the internal border. There, the zero rate is confirmed by an application for the import of goods bearing a mark of the tax authority of the buyer’s country.

Input VAT

The deduction procedure depends on the goods. For raw materials, the deduction is tied to the moment the zero rate is confirmed. For other goods, the deduction is available under the general procedure. To approve the reclaim, the tax office runs a desk audit and may request documents.

Export of services

The rules for services are different. Many services to foreign customers are not subject to Russian VAT at all, because Russia is not considered the place of supply. The zero rate applies to services only in the cases expressly listed in the Tax Code.

Proceeds through an agent

The way the money is received does not affect the VAT rate: the rate is confirmed by documents on the export of the goods. For currency control, something else matters: the proceeds must arrive within the periods set in the contract, and the agent’s documents must show how the payment relates to the contract. More details: Repatriation of export proceeds.

This overview does not replace tax advice. We decide how to handle your export deal only after reviewing its documents.