The significant changes to the Russian tax law apply from 1 January 2019.
As of 1 July 2019 input VAT related to export of many types of services including software development, consulting, legal, marketing services (with some exceptions) may be recovered.
Russia has ratified MLI in May 2019. With that some formal steps have not been made, and the Russian Ministry of Finance issued a clarification in December 2019 where it pointed out that MLI would apply to withholding taxes not earlier than 1 January 2021. Starting from that date tax agents should consider both DTT and MLI provisions when paying passive income abroad (in most cases Principle Purpose Test should be passed). In practice, the Russian tax authorities have already started to test business purposes of significant cross-border transactions.
Last Reviewed - 31 December 2019