Russian government has issued an initiative that foreign IT-companies shall be registered in Russia and pay Russian taxes.
Foreign search engines, marketplaces, social networks, messengers, content and game services making revenues in Russia will be obliged to register a Russian branch, subsidiary, joint venture or undergo an online registration at Russian tax authorities.
The new regulation shall apply to big companies with audience exceeding 500 thousand users.
After the new law enters into force, companies will have one month to register their presence in Russia, otherwise sanctions and restrictions may apply.
The new regulation shall equalize business and taxation conditions for domestic and foreign IT-companies working in Russia, increase the number of workplaces. However, some experts believe the new initiative may be used to oppress foreign IT-companies and drive them away from Russia.
The law is expected to be adopted after August 2021.
It shall be mentioned that Russia has already successfully introduced the so called “Google tax” whereby foreign companies selling electronic services, games, music, books, and videos to Russia shall pay Russian VAT. About 150 foreign companies (including Google, Apple, Facebook, Amazon and Netflix) are already registered by Russian tax authorities and pay Russian VAT.