As cross-border e-commerce between Belarus and Russia continues to expand, staying ahead of tax regulations and marketplace requirements is essential for sellers. Recent amendments to Article 151 of the Russian Tax Code, effective January 1, 2025, have introduced significant changes. The Ministry of Taxes and Levies, guided by explanations from the Ministry of Finance of the Russian Federation, now requires commission agents importing goods into Russia from Eurasian Economic Union (EAEU) countries to pay VAT under agency, commission, or similar agreements involving sales to individuals. Coupled with updated marketplace policies from platforms like Ozon, these developments create both challenges and opportunities for Belarusian businesses. Here’s what you need to know to stay compliant and thrive in this evolving market.
1. VAT Compliance: What’s Changing?
Starting January 1, 2025, Russian commission agents who import goods into Russia under agency or commission agreements will need to pay VAT on these goods. This change stems from amendments to Article 151 of the Russian Tax Code.
Key Points for Belarusian Sellers:
- Who Pays VAT? When goods are imported into Russia and sold to individuals through platforms like Ozon, the Russian commission agent—not the Belarusian seller—must handle VAT.
- What Does This Mean for You? While the tax burden falls on the agent, Belarusian sellers should clearly define responsibilities in contracts to avoid misunderstandings.
2. Selling on Ozon: Optimizing Your Pricing
Ozon advises Belarusian sellers to use two separate personal accounts to manage VAT obligations efficiently:
- Account 1: For sales to Belarusian buyers, where prices must include VAT.
- Account 2: For sales to foreign buyers, excluding VAT for Belarusian transactions to non-residents.
A New Twist: Russian VAT on E-Commerce
From July 1, 2024, Ozon will automatically add Russian VAT to goods sold to Russian buyers. This means:
- Prices visible to Russian buyers will increase by the VAT rate.
- Belarusian sellers should set their base prices carefully to remain competitive after the VAT adjustment.
3. Practical Tips for Success
VAT Compliance for Russian Commission Agents
- Document Everything: Keep detailed import and sales records to simplify VAT reporting.
- Strengthen Contracts: Work with Russian agents to ensure tax obligations are clear in agreements.
Pricing and Platform Optimization
- Currency Considerations: Display prices in the buyer’s currency to avoid confusion.
- Dynamic Pricing Tools: Adapt quickly to changes in VAT rates, marketplace fees, and demand.
Risk Management
- Stay Audit-Ready: Tax compliance is critical. Invest in software or hire experts to avoid costly mistakes.
- Logistics Alignment: Ensure customs declarations match your VAT reporting for seamless cross-border operations.
4. Beyond VAT: Strategic Moves for Long-Term Growth
Marketplace-Specific Rules
Ozon’s VAT adjustments may not apply uniformly to all platforms. Sellers on others should research their specific rules to avoid surprises.
Leverage EAEU Agreements
Monitor changes to Eurasian Economic Union (EAEU) regulations that might simplify cross-border trade. These can impact VAT obligations or import procedures.
Targeted Marketing
Highlight price advantages to foreign buyers when VAT is excluded. For instance, emphasize competitive pricing for Russian customers who see VAT-inclusive costs due to Ozon’s adjustments.
Looking Ahead: Adapting to a New E-Commerce Landscape
As e-commerce grows more complex, preparation is your best tool. From streamlining tax compliance to refining your pricing strategies, these steps will help you succeed:
- Invest in Expertise: Tax consultants or VAT-specific software can make a huge difference.
- Plan Strategically: Use separate accounts for better tax management, and tailor your pricing to each audience.
- Communicate Clearly: Ensure agreements with agents or platforms cover all tax-related responsibilities.
By staying informed and proactive, Belarusian sellers can navigate these changes with confidence, maximizing their growth potential in the Russian market.
This user-friendly guide is designed to help you thrive amidst change. Stay compliant, competitive, and ready to seize the opportunities that cross-border e-commerce offers!
