Tax & Accounting Blog

Russia – Exemption for Software Rejected

Indirect Tax, ONESOURCE, VAT Tax Rates April 8, 2013

On March 31st the Russian government rejected a plan to amend the tax code to exempt software products from the value-added tax (VAT). The proposed exemption was intended to make licensed software products such as Microsoft Windows more affordable by excluding them from the country’s 18 percent VAT and thus combat counterfeiting.

The government released a statement explaining that Subsection 26, Section 2, Article 149 of the Russian Tax Code already exempts software products sold in accordance with license agreements from VAT and that the proposed exemption of software product sales to individuals regardless of any license agreements would allow sellers of unlicensed products to benefit from the exemption.