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When dealing with foreign counterparties, even routine transactions can carry hidden tax risks. This is especially true when an intermediary is involved. In Letter No. 03-07-08/94479 dated September 30, 2025, the Russian Ministry of Finance provided important clarifications that affect many companies acquiring services from abroad.
The Core Clarification
A Russian organization purchases services from a foreign entity, and the place of supply of these services is recognized as the territory of the Russian Federation. Payment is made through a payment intermediary (e.g., an international payment system or an intermediary bank). In this situation, according to the Ministry of Finance, the Russian company is obligated to act as a tax agent for VAT purposes.
The key point: the tax must be calculated and withheld at the moment funds are transferred to the intermediary, not directly to the foreign service provider.
How to Properly Document It
The tax agent is required to:
Financial authorities have expressed a similar position before, making this approach a consistent one.
- issue an invoice at the time of payment transfer;
- indicate in the invoice the number and date of its own payment settlement document related to the transfer of funds to the intermediary.
Financial authorities have expressed a similar position before, making this approach a consistent one.
Why This Matters
Errors in calculating VAT when dealing with foreign entities are a common reason for additional tax assessments during audits. If your company pays non-residents through intermediaries, it is crucial to:
- correctly determine when the tax agent obligation arises;
- accurately calculate the tax base (in the payment currency);
- issue the invoice in a timely manner and properly reflect the transaction in the VAT return.
Acsour Experts Are Ready To:
Contact us — we will analyze your foreign trade contracts and ensure VAT is paid correctly, protecting you from potential claims.
- Review your contracts with foreign counterparties and payment schemes to identify potential tax agent obligations.
- Assist with the correct calculation and payment of VAT on cross-border payments.
- Provide advice on issuing invoices and reflecting transactions in your reporting.
Contact us — we will analyze your foreign trade contracts and ensure VAT is paid correctly, protecting you from potential claims.
