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Russia's State Duma passes "Google Tax" bill

The draft law envisages a value-added tax (VAT) to be paid by foreign companies trading electronic content in the territory of Russia via Internet

The Russian state Duma Alexey Filippov/TASS

The Russian state Duma

© Alexey Filippov/TASS

MOSCOW, June 15. /TASS/. The State Duma approved in the third reading the draft law on value-added tax (VAT) to be paid by foreign companies trading electronic content in the territory of Russia via Internet [known as "Google Tax" bill - TASS].

According to the draft law, foreign companies will need to register in the special electronic register of the Russian tax service and pay taxes pari passu with Russian companies operating in the same market segment.

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The value-added tax will apply to sales of electronic books, images, music and audiovisual products, including provision of remote access to them for viewing or listening via Internet.

Sales of computer programs, including computer games and databases will also be subjected to VAT, along with remote access to them, updates and extra options. The VAT will cover provision of advertising services and advertising spaces in the Internet, goods purchase and placement services, provision of trading floor in the Internet, domain names, hosting services, and administration of websites.

Sales of goods and services will be exempt from VAT if goods are supplied or services are provided without the Internet use when ordered via the Internet. VAT will not apply to sales of programs and databases on material media, consulting services via email and Internet access provision services.

Approved norms will come into force from January 1, 2017.

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