Foreign online retailers want to tax

The Association of Internet Commerce Companies (AKIT) has proposed a tax for foreign online sites such as AliExpress, Amazon and eBay. However, this may lead to the refusal of foreign retailers to operate in Russia, writes Kommersant.

AKIT believes that foreign sites selling goods via the Internet now have a competitive advantage over national suppliers in the form of exemption from VAT and import customs duties when selling goods worth up to € 1 and weighing up to 31 kg. Currently, a draft amendment to the Tax Code has been developed, which introduces a mechanism for VAT registration of foreign online stores, similar to the so-called Google tax, which entered into force on January 1, 2017. Within its framework, foreign companies selling electronic content or software via the Internet in Russia must register with the tax service and pay 18% VAT on a par with Russian companies.

For online stores offering cross-border delivery of goods, the tax is proposed to be calculated using the simplified method, it will be 15,25% of the final price of the goods.

The Federal Tax Service will receive the right to send to the electronic trading platform a request to block the page of a seller who does not fulfill the obligation to pay VAT. If it does not take effect, the tax will appeal to the court and Roskomnadzor, which, after receiving a court decision on restricting access to non-paying pages, will send communication operators the requirement to block them. The project also provides for a seller’s unlocking mechanism within three days after it has paid VAT.

Representatives of foreign retailers believe that the complexity of the sale process can significantly reduce the range of goods delivered to Russia from abroad. “The cost of goods of foreign sellers already includes the transaction costs of the store, national taxes and fees, moreover, the commission for using the online platform and payment system. The choice of a purchase from abroad is affected by the cost of delivery and the period of its expectation: the absence of these factors in Russian stores is their competitive advantage, which is constantly ignored. In addition, retail imports are already regulated by customs duties, ”says Ilya Kretov, CEO of eBay in Russia and the emerging markets of Europe, commenting on the AKIT initiative. In his opinion, the adoption of the proposed amendments will force foreign online retailers to stop selling their goods in Russia.

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