On its way to tax free in Russia

Several Russian Ministries have started working closely on the pilot project of VAT refund system
On its way to tax free in Russia
29 April 12:37 2016 Print This Article

By the end of 2016 foreign tourists in Russia will be able to VAT refund, Russian newspaper Kommersant reports referring to a copied document complied at the meeting held by the first Vice-Premier Igor Shuvalov.

The responsible ministries, in particular the Ministry of Industry and Trade, Finance Ministry, Federal Customs Service and the Federal Tax Service, are now working on the Tax Free pilot project. Largest domestic luxury-retailers have expressed their willingness to participate while consultations are taking place with major tax free refund companies Global Blue and Premier Tax Free (Fintrax).

According to the document, foreign tourists would be able to VAT refund from minimum purchase amount of 10 thousand rubles (around 156 dollars). The pilot project might initially be launched in Moscow’s GUM department store, Petrovsky Passage, Vesna (Spring) shopping center, Central Department Store, Barvikha Luxury Village, Crocus City Mall, and others.

Should the trial be successful, other companies with a minimum turnover of 100 million rubles and those holding shopping facilities in cities with international airports will be allowed to participate in the programme. They will have to apply to the Ministry of Industry and Trade to get certified.

At the end of 2015 Consulting company SSC has evaluated the Russian luxury-market at 10,4 bln dollars. Back in autumn 2014, Prime Minister Dmitry Medvedev had already instructed the Ministry of Finance to study the possibility of introducing tax free, which in turn considered the initiative inappropriate.

Anastasiia Kochkurova

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