Introduction of the tax free system in Russia
Since 2018, the law on the introduction of a VAT refund system for purchases of foreign citizens (tax free) in Russia comes into force. The right to reclaim VAT will be given to citizens of foreign countries that are not members of the Eurasian Economic Union. In order to receive a refund, it is required to purchase goods within one day for not less than 10 thousand rubles including tax. To receive reimbursement, the goods should be exported through the checkpoints.
The checkpoints for VAT refunds should start operating in October 2018 at the airports of three Russian cities – Moscow, St. Petersburg and Sochi. The Federal Customs Service organizes 14 tax free points in aviation nodes of Domodedovo, Sheremetyevo, Vnukovo, Pulkovo and Sochi. It is expected that after 2018 the list of cities will be expanded.
The government of the Russian Federation will approve the criteria for selecting stores that will participate in this project. The government should also determine the list of places where stores should be located.
As noted, foreigners will be able to reclaim VAT within one year from the date of purchase of goods subject to their export within three months from the date of acquisition.
According to the head of Russiatourism Oleg Safonov, the launch of this system will contribute to the development of inbound tourism in Russia. “We consider this to be very important and well-timed. This will be of great importance for the development of inbound tourism and will stimulate purchases in our country,” Safonov said.
It is assumed that the VAT refund system (tax free) will increase the interest of foreign tourists to Russia and will have a positive impact on the tourist flow.