Russian authorities want their piece of pie from borderless trade. Russian customers have positive experience in buying goods or services from abroad from foreign companies through their web-site or services available also in Russia. Russian customers pay real money and overseas companies make profits from such purchases, but Russian government does not receive taxes from such purchases, but it really wants to do.
Russian authorities want to make overseas online stores to pay taxes to Russian state budget. How they decide to do it? One option could be restriction of access to web-resource or online store if the last is not registered for taxation purposes. If the online store does not want to pay VAT, the customers, residing in Russia, would not have access to it. The authority to require restriction of access can be provided to Russian Federal Tax Service (FTS).
Briefly about the draft law. Alien sellers are to be taxpayers, online outlets and other possible intermediaries are to be tax agents. Tax agents should withhold sales tax when the good is sold to Russia through internet. The proposed tax rate is 15,25%. If the price is set in currency other than Russian, the price is to be recalculated into Russian roubles in accordance with the exchange rate set by the Russian Central Bank at the last day of tax period when the payment for good was made.
How taxpayers or tax agents have to execute new law provisions? In order to pay tax to Russian budget the payer or agent must register in FTS if its quarter turnover is more than 2 million Russian roubles. It can mean that small outlets, if they quarter turnover is lesser than 2 million roubles are out of regulation. The reach sellers and platforms are of more interest for Russian fiscal authorities, which deal only with big sums.
If the seller does not pay taxes, despite the fact that its jurisdiction is not Russian Federation and it pay taxes only in its jurisdiction? First of all the FTS would require the internet outlet to block seller, if such seller trades on platform. If the platform refuses to block the seller, the FTS has the right to require Russian Roskomnadzor to restrict access to the page of the seller or to entire site for customers residing in Russia. The explanation note to the draft law states that new amendment would increase revenues for state budget. It seems the target of new law would be Alibaba, Amazon, Ebay and other major retailers.