Foreign tourists may be exempted from sales tax in Russia

The tax free system may be launched in shopping centres frequented by overseas buyers
Share 17 August 2015
Sergei Konkov/TASS
Tourists in Saint Petersburg

The Federal Agency for Tourism has proposed creation of a ‘tax free’ system, which would return sales tax to foreign guests, thus providing an incentive to come to Russia and purchase goods here. The system may be launched in shopping centres which are frequented by tourists from other countries.

A similar proposal was made in 2014, but at the time the Finance Ministry deemed it unnecessary. Deputy Finance Minister Sergei Shatalov noted: “This would give no economic or other benefits and will end up only in budgetary losses.”

Apart from a tax free system, the Federal Agency for Tourism also proposes mandatory hotel star rating system with clearly defined requirements and standards use for assigning a particular rating to an establishment. The proposed Russian rating system will correspond to the World Tourism Organization (UNWTO) recommendations.

Such a star rating system was used in Sochi during the 2014 Winter Olympics. Hotels of cities hosting World Cup 2014 will also be using the rating system.

Tax free

A tax free system allows a foreign tourist return sales tax on purchases made in another country. For example, Russian citizens use this principle when traveling back from EU countries.