Facebook Will Introduce VAT of 20% on the Advertising in Russia
OREANDA-NEWS The company Facebook, which owns the eponymous social network, warned users registered in Russia about the introduction of value added tax (VAT) in the amount of 20% when buying advertising. This is stated in the message posted on the website Facebook.
"Since January 2019, the purchase of Facebook advertising in Russia is subject to value added tax of 20%," it says. As reported in the social network, this innovation will affect all advertising accounts, which as the country of business indicated Russia.
To continue advertising on social networks, account holders need to make sure that their settings include the correct company name, address and taxpayer identification number (TIN), the report said. The tax will be levied regardless of whether advertising is placed for personal or commercial purposes, the company noted.
Facebook emphasizes that it is not necessary to specify the VAT number, but it can facilitate the VAT refund procedure with the help of the tax authorities of the Russian Federation. The social network also reported that Facebook is not engaged in tax consultations, and recommended to apply for relevant information to the relevant departments of their countries.
From January 1, 2017, the law came into force in the Russian Federation, according to which foreign companies trading electronic content on the Internet in the country are obliged to pay VAT. The document became known in the Internet environment as the"tax on Google".
Since 2019 in Russia comes into force a new mechanism of collection of "tax on Google" - VAT on electronic goods sold on the Internet (games, music, books, etc.). Foreign companies will have to register with the Federal tax service and independently pay VAT on the services they provide to Russian business. According to the current procedure, the tax is paid by customers.
In early November, the Director General of the Association of European business (AEB) Frank Schauff in a letter addressed to the first Deputy Prime Minister, Finance Minister Anton Siluanov and the head of the FTS Mikhail Mishustin complained about the new procedure for tax collection. In his opinion, the tax creates "tangible inconveniences" that can become an additional barrier to doing business in Russia.
Schauff proposed to keep the old VAT payment mechanism.