Russia's 2025 VAT reform: how your buyer's tax status changes the landed cost of your shipments

What changed for your buyer in Russia

Most small and mid-sized Russian distributors, trading houses and workshops work under the simplified tax regime. Until now they were outside the VAT system entirely. From 2025 they became VAT payers, with the rate tied to annual income:

• income up to 60 million roubles — the previous conditions stay in place: neither companies nor sole traders apply VAT;
• income up to 250 million roubles — the buyer is entitled to the 5% VAT rate;
• income up to 450 million roubles — the buyer is entitled to the 7% VAT rate.

A company may also choose the general tax regime voluntarily, even with a turnover below 60 million roubles. In that case there is no reduced option: the general 20% rate applies. Nothing in the tax code allows a smaller figure, so the decision is a real one, not a formality.

The criteria for staying on the simplified regime are annual income of no more than 450 million roubles, a headcount of no more than 130 people and a residual value of fixed assets within 200 million roubles. The application to the tax office had to be filed by 31 December 2024, and the chosen rate is locked in for the following three years.

Why import VAT now stays inside your buyer's cost

Here is the part that reaches your invoice. A buyer on the 5% or 7% rate has no right to deduct input VAT — none of it, and import VAT is no exception. The VAT paid at the border when your goods are declared is money that never comes back to them; it simply becomes part of the purchase price of your product. A buyer on the general 20% regime deducts it as before, so two customers ordering identical goods from you now carry different real costs.

A Russian buyer on the 5% or 7% rate cannot deduct any input VAT, including the VAT paid at customs on your consignment. That amount stays in their landed cost for good, and it is the first thing they will try to renegotiate with you — on price, on delivery terms, or on order volume.

This is worth understanding before the conversation starts, because the request usually arrives as "your price is too high" rather than as a tax question. The size of the effect depends on the duty rate and the customs value of your goods, which is exactly what customs clearance in Russia settles, and on the delivery terms you agreed. If you want to know the figure your buyer is looking at, ask us for a calculation of duty and import VAT for your product before the shipment is booked; we handle turnkey logistics and customs clearance for consignments arriving from any country.

Documents and dates to check before you ship

The tax change itself is a domestic Russian matter, but it moves things on your side of the deal in two ways.

The counterparty may not be the same entity. Buyers working close to the 250 or 450 million thresholds sometimes re-arrange which of their legal entities does what in order to stay inside a bracket. If the importer of record changes, everything that names the buyer has to change with it: the contract, the commercial invoice, the packing list, the consignee in the transport documents. A consignment where the consignee on the bill of lading or CMR does not match the declarant on the customs declaration is not a paperwork nuisance — it stops at the border until the documents are corrected, and correcting documents that have already travelled takes days, not hours.

Permits follow the applicant, not the goods. A declaration of conformity or a certificate is issued to a specific Russian company. If your goods are cleared by a different entity than the one named in the existing document, the permit has to be reissued before the shipment arrives; certification is best sorted out while the goods are still in your warehouse.

The choice is fixed for three years. Because the rate applies for the following three years, a buyer who ends up on 5% or 7% carries the non-deductible import VAT through several ordering seasons. Any pricing or terms you agree now is a multi-year arrangement, not a concession for one quarter.

What the exporter should do

1. Ask your buyer directly which tax regime and which VAT rate they are on from 2025. The answer tells you whether import VAT is a real cost for them or a neutral pass-through.
2. Before issuing the commercial invoice, confirm in writing the exact legal name and details of the company that will be the importer of record, and make sure the same entity appears in the contract and in the transport documents.
3. Check that any certificate or declaration of conformity covering your product is held by that same entity, and start the reissue early if it is not.
4. Recheck the delivery terms. If the buyer asks to move the customs formalities and payments to your side, price that properly — it means you take on the duty, the import VAT and the clearance risk in Russia.
5. Get a duty and import VAT calculation for your product before the consignment is booked, so the commercial discussion is based on the real landed figure rather than on an estimate.
6. Build extra time into the first shipments after any change of counterparty on the buyer's side. Documents that have to be corrected after the truck or container has left cost far more time than a check before loading.

Frequently asked questions

Does this change anything in my own export documents?
No. Russian VAT is a domestic tax paid by your buyer, and your export paperwork stays the same. What changes is the cost your buyer carries on the same goods, and therefore the commercial conversation you are about to have.

Can my buyer reclaim the VAT paid at customs on my goods?
Only on the general 20% regime. On the reduced 5% and 7% rates no input VAT can be deducted at all, and import VAT is explicitly included in that.

Can a buyer with a small turnover simply choose the general regime to recover import VAT?
Yes, a company with turnover below 60 million roubles may move to the general regime. But then it applies the general 20% rate on its own sales — there is no reduced option in that case.

My buyer asks to change the consignee shortly before shipping. Is that risky?
It is manageable if you do it before the documents are issued and before the goods move. Once the invoice, the packing list and the transport documents are out with the old company on them, the shipment will be held at the border until every document is aligned with the declarant.

Summary

From 2025 Russian buyers on the simplified regime pay VAT at 5%, 7% or 20% depending on their income, and those on the reduced rates cannot deduct input VAT of any kind, import VAT included. For the exporter this is not a filing change but a cost change on the other side of the deal, which shows up as pressure on price and delivery terms. The practical risk is documentary: if the buyer's importing entity changes, the contract, the invoice, the permits and the consignee in the transport documents must change with it, or the shipment waits at the border. Request a consultation, and we will go through your specific consignment — duty, import VAT and the documents your Russian buyer will need.

Send us your product description and terms of delivery, and we will confirm the duty and import VAT on your consignment before you load it.

Request a consultation