Russia may extend tax free to all cities in 2019

Moscow: Russia plans to extend in 2019 the tax free system to all Russian cities after a pilot project in the cities hosting the 2018 FIFA World Cup, a media report said.

“After testing the pilot tax free project, we plan to extend it to the whole country starting from 2019,” Industry and Trade Minister Denis Manturov was quoted as saying by Russian news agency Tass.

Deputy Minister of Industry and Trade of the Russian Federation Viktor Yevtukhov told TASS earlier that the tax free system will be launched in several cities hosting the 2018 World Cup from April 10.

“Starting from 10 April, the outlets that will participate in the system, within the locations, so far the limited number that were defined, will be able to do it. Thus, the foreign citizens who purchase goods that are now in the system will be able to receive a partial VAT refund,” Yevtukhov said.

“I hope that by the end of the year we will develop it all over Russia. I think that at the end of the year it will be decided that we will move from pilot to work across Russia,” he added.

According to Yevtukhov, VAT refund within the system will be partial - 10-12% of price of goods with the purchase of at least RUB 10,000 ($173).

The tax free system was launched in Russia in January 2018, but the electronic document circulation between retailers, the system operator, the Federal Customs Service, the Federal Tax Service and the buyer will not start until October 2018, according to the report.