The Russian Government approved a number of proposed changes to be introduced to the Russian Tax Code from 2019. The tax initiatives, among others, include the following important changes in the Russian VAT regime:

  • An increase in the VAT base rate from 18% to 20%, effective from 1 January 2019.
  • A decrease in the minimum threshold of the amount of tax paid for the three previous calendar years from RUB 7 billion to RUB 2 billion in order to qualify for the accelerated simplified input VAT refund procedure.
  • A shortened time period for chamber tax audits for purposes of input VAT refund.

The Russian State Duma voted to adopt the changes on 24 July 2018. Taxpayers should consider these changes in planning the tax burden for 2019 and going forward, especially concerning long-term investment projects.