A pilot project to refund value-added tax (VAT) to foreign tourists is due to be launched in Russia in the second quarter of 2017. This will allow non-residents of the Eurasian Economic Union to recover a portion of the VAT paid for goods (other than food) purchased during their stay in Russia. According to press reports, the implementation of the tax-free system will be done in two stages. During the initial pilot stage (which should last 1.5–2 years), a limited number of retailers (in particular, some Bosco stores, TSUM and DLT in the Mercury group, the trade center Concept Store 152, the Butterfly – Grand Hotel Europe gallery and Crocus City Mall) in Moscow, Saint Petersburg and Sochi will take part in the project. During the second stage, it is expected that any retailer will be able to take part in the project.
A draft of the federal law on the implementation of a tax-free system in Russia has been placed on the Internet site on which drafts of federal normative acts are published (for more details, please see https://regulation.gov.ru/projects#npa=52623). At this time, the usual public consultation process with respect to the draft is taking place.
The current version of the draft envisages a refund of VAT on purchases of 10,000 rubles or more (approximately 160 euros at current exchange rates). Receipts for the tax refund will be issued by those retailers that have been included in a special list. An application form for inclusion in the list and the procedure for application review are to be adopted by the RF Ministry of Industry and Trade (Minpromtorg), which will maintain the list.
According to information on Minpromtorg’s website, any retail trade organization that wishes to be included in the list can take part in the pilot project. The application form for inclusion in the list and the procedure for application review are yet to be determined, but we will be happy to advise you on how to take part in the pilot project at this stage.