The new bill on VAT for IT-companies: the views of politicians, analysts and businessmen

Today, December 24, a bill was submitted to the State Duma (we also wrote about it earlier), according to which e-services that provide foreign and domestic companies will be subject to VAT. According to the original plan of the creators of the bill, it should come into force in a year - January 1, 2017. From the recall signed by Sergei Prikhodko, the head of the government staff and the deputy prime minister, it follows that the government supports the draft law “subject to its refinement, taking into account the comments made.”



According to German Klimenko, Chairman of the Board of Directors of the Internet Development Institute (IRI), this bill provides equal market conditions for domestic and foreign players, mentioning also that in Europe VAT is charged not at the place of company registration, but in the country where the user is located which service is provided. “I’m generally in favor of everyone working at the same site in the same way. In addition, abroad there is a long time ago the practice of collecting VAT at the place of provision of services, ”he says.



Initially, the authors of the bill claimed that it was directed mainly to foreign companies selling music, movies, e-books, games, applications and software in their stores. However, after studying the document, tax practice partner Goltsblat BLP Yevgeny Timofeev noted that the bill also affects domestic organizations, as it introduces VAT on software licenses for PCs and databases.

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Nikolai Komlev, executive director of the Association of Computer and Information Technology Enterprises (APKIT), believes that the main purpose of this bill is nothing but filling the budget by any means. He also noted that in the current document the VAT rate was not specified, and it is quite possible that in a year it will be higher than the current 18%. In his opinion, the bill will affect all programs that fall into a single register of domestic software for public procurement, the creation of which should be completed next year.



According to RAEC leading analyst Karen Ghazaryan, the industry faces death if the VAT on applications rises from 0 to 18%.



Sergey Kravtsov, the creator of the national 4Talk messenger, believes that as a result of the adoption of this bill, companies will begin to raise prices for content, shifting part of the costs to customers.