Central regions | Telecoms, media | Finance, business
Russia’s leading telecom retailer: VAT for foreigners or farewell to Russia
20 Oct '16
Euroset, one of Russia’s largest telecom retailers, is considering relocating to the neighboring Baltic states (Lithuania, Latvia and/or Estonia) with its entire online business early next year unless value-added tax (VAT) regulation is made equal for Russian firms and international companies operating in Russia, Firrma.ru reported, citing Euroset president Alexander Malis.
Currently, international online retailers do not pay VAT in Russia. According to Mr. Malis, that adds another 15% to the cost of doing online business for domestic players, increasing profit margins for foreign retailers, including those from China, as the Russians simply can’t compete with the foreigners in pricing policy.
Alexey Fyodorov, the president of Russia’s E-commerce Companies Association, said earlier this fall that unless the Russian regulators introduce a level playing field for both domestic and international companies in terms of VAT, the Russians will have to elect an offshore modus operandi model and build infrastructure outside of Russia.