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ICLC develops new service: ‘Google tax’ advice

Introduced in Russia on 1 January 2017 the ‘Google tax’ involves payment of 15.25% VAT on all sums received by foreign companies providing services in electronic form, or selling content to individual consumers in Russia. To pay the tax, large global IT companies, including Google, Apple, Microsoft, LinkedIn and Netflix, have already registered with the Federal Tax Service.

ICLC’s experts are therefore engaged in developing a tax risk management strategy for any companies that need to pay the new tax, to enable such clients to avoid unexpected claims from the tax authorities.

We are also engaged in awareness-building work. Last December, Anna Gulyaeva, Head of ICLC’s Audit Department, spoke at the annual conference ‘Legal Results of the Year for the IT and Telecommunications Sector’, held in Moscow. Anna explained to the conference attendees how such electronic service taxation in Russia will be administered, what services fall within the Google tax law, and those cases in which exemptions may be applied when selling rights to software. Furthermore, our tax experts have developed a guide booklet that can help companies to decide whether they fall within the scope of the new tax. The booklet is publicly available on our website.