For a few last weeks, the Russian Government is actively discussing the possibility of introduction of the sales tax starting from 1 Jan 2015. The sales tax will apply to the retail sales of the goods and services.
The draft law allows the regions to introduce the sales tax at the rate of 3%. The tax period has to be set as one month, i.e. at the end of each month the companies and individual entrepreneurs (which were selling the goods and services) will have to calculate the sales tax and pay it to the regional budget. Thus the retail sales shall become subject to both VAT and sales tax.
Earlier the sales tax was applied in Russia until 2004.
If the decision on introduction of the sales tax would be the case, the effect of what we have seen recently in Japan could be expected. Prior to introduction of the tax the retail sales significantly increased and further after introduction – decreased. The decision in respect of the sales tax in Russia may be taken in the very close future.
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