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Prices in the Russian App Store will grow by 30-50% because of the “tax on Google”

In July of this year, Russian President Vladimir Putin signed a law obliging foreign companies selling to Russian users of the content via the Internet, to pay VAT. We are talking about the so-called “tax on Google”. As you might expect, this tax will primarily fall on consumers.

This week, Russian Internet users began to receive notifications from Google that the company began to include in their accounts the value added tax (VAT). In one of these letters referred to the inclusion of VAT in the account for the service using the service Google Drive.

“In accordance with the law passed by the State Duma of the Russian Federation, from January 1, 2017 the VAT of 18% will apply to all customers of Google Drive, who are residents of Russia, — said in the letter. Company Google cannot provide you with tax advice and recommends that you address all questions regarding this change to your tax Advisor”.

The document was submitted to the Duma in December 2015. The amendments mean that foreign companies and their organizations-intermediaries will have to register with the tax office and pay the tax to the added cost, if they want to sell their products via the Internet in Russia.

Obviously, in the first VAT are subject to purchases of Russians in foreign online services with media products such as the iTunes App Store, Google Play, games shops, Xbox and PlayStation. This apps, games, movies, music, ebooks, image.

A law that comes into force on 1 January 2017, will lead to the fact that the prices of products that are available to Russians via the Internet, there are apps in the App Store and Google Play, will increase. According to Vyacheslav Losev, managing partner of “Losev and partners”, the Russians should expect an increase in value by 30-50%.

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Google does not comment on future rise in price of apps in Google Play. The press service said that while the company is studying the document, after which a decision will be made. The Russian representative office of Apple are unable to provide a comment.

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