Russia Proposes Phased VAT for Marketplace Sellers

The Russian government is considering a bill to increase maximum compulsory third-party liability insurance (OSAGO) compensation. The current threshold discussed is 400,000 rubles. The Russian Ministry of Finance has submitted a bill to the State Duma to impose Value Added Tax (VAT) on marketplace sellers. Under the proposed legislation, online platforms would act as tax agents, collecting payments from sellers and transferring them to the state budget. This move aims to formalize tax collection within the digital commerce sector. The proposal aims to level the competitive playing field between online platforms and traditional retail. Following this, a general 22% tax rate will be applied to marketplace goods in the subsequent year. The Ministry cited planned changes to the EIS customs code as the driver for this shift. Dmitry Borschevsky, a representative for Wildberries Russia, stated that a gradual rollout would allow market participants to adapt to new conditions. This approach aims to help sellers adjust pricing and assortment policies while allowing consumers to gradually absorb potential price increases. The proposal notes that the share of cross-border goods on these platforms remains extremely insignificant. Artem Sokolov, president of the Internet Trade Companies Association, stated that an initial 7% VAT rate is unlikely to cause price increases for consumers.