The Russian authorities have abandoned the plan to gradually increase VAT on foreign goods which Russians order through marketplaces and have proposed the rate of 22% to be applied immediately. Kirill Chernovol, Researcher at the Gaidar Institute’s International Best Practices Analysis Department, spoke to Forbes about the consequences of this measure.
According to the expert, an increase in VAT will lead to higher prices for such goods: the tax is ultimately included in the purchase price. For Russian sellers, this simultaneously means more equal competition conditions with foreign suppliers.
It concerns goods which the buyer orders abroad and are specially delivered to Russia. Imported products that have already been brought into the country for subsequent sale are now subject to VAT.
Kirill Chernovol noted that collecting VAT on online purchases is a common international practice. In some countries, the tax on sales of goods through marketplaces is collected by the platforms themselves or by other operators. Special rules often apply to low‑cost goods.
The expert also focused on the change in the approach to the rate. Previously, it was discussed that it would be gradually increased: 7% in 2027, 14% in 2028 and 22% in 2029. Now, it is proposed to switch immediately to a rate of 22%.
“The abandonment of a gradual transition raises the requirements for preparing the reform. Businesses will have to revise prices and calculate sales return on investment more quickly. The less time there is between the approval of the rules and their implementation, the higher the risk of additional costs and technical errors. Marketplaces and sellers will need to restructure their accounting and workflows in advance,” Kirill Chernovol noted.
The expert also assessed other proposals for changes to the tax system. According to him, they are primarily focused on certain types of income and transactions: passive income of citizens, cross‑border online trade and the income of some extractive companies.
The changes also affect the taxation of citizens’ incomes. When expanding the progressive personal income tax scale, the procedure for summing up salaries, dividends and interests in determining the tax rate becomes important. Therefore, the final burden on a specific individual can be assessed only after the relevant rules are in place.
According to Kirill Chernovol, an increase in taxes on dividends and other capital income may also affect the decisions of private investors. Some funds may move from deposits and financial instruments to other jurisdictions where tax conditions are more favorable.