On Wednesday, June 15, the State Duma of the Russian Federation passed a law under which all foreign IT companies are required to pay 18% VAT for the sale in Russia of digital content, applications, voice and data storage services, hosting and domain name registration . The bill was called “tax on Google” by the people. On June 6, the deputies claimed that the final version of the law would be developed this fall, but as we see, no one came to wait for the fall.
So what will fall under the influence of the new law? According to official data, any new programs, applications, games, databases, advertising platforms, online auctions, platforms for ad placement, data storage services, hosting providers, domain registration, automated search services (here you and Google ) fall under the new taxation. , digital books, music, graphic images, statistics of website visits, etc. In fact, prices should rise to almost anything that can be purchased online. It would be reasonable to assume that foreign companies will shift additional costs to Russian users.
The Government of the Russian Federation plans to receive taxes from foreign companies in the amount of up to 10 billion rubles. In the future this amount will only grow. The document on the bill was introduced in December 2015 by deputies Andrei Lugov (LDPR) and Vladimir Parakhin (“Fair Russia”) and passed the first reading as early as the end of February 2016. On March 30, presidential adviser Herman Klimenko tried to explain to the deputies that the introduction of such a law would complicate the lives of many Russian software developers, since most of the domestic companies sell software through foreign legal entities. The bill was promised to be finalized so that the domestic IT-segment would not suffer.
As a result, the edits have not been made. Because of this, domestic developers will now have to pay VAT in double volume. For example, the company Nival has officially announced that it ceases to develop games for the Russian market and stops localizing Western projects for Russian-speaking users. This is more simply unprofitable. “It’s time to move on,” said Sergei Orlovsky, founder and head of Nival.