The Russian IT industry will continue to benefit from the VAT exemption

Good news. You can take a breather.

Yesterday in the State Duma, the first reading of amendments to the Tax Code took place. The package of proposals was adopted. It was immediately noted that some points would be softened during the second reading of the amendments.

In particular, Deputy Prime Minister Dmitry Grigorenko announced that an agreement had been reached to refrain from imposing VAT on Russian software developers:

“Following discussions (consultations) with the Russian Ministry of Finance, State Duma deputies, and senators, the government believes it is possible to postpone the cancellation of the existing VAT exemption, which could negatively affect the development and implementation of Russian software in the economy.”

“It is proposed to establish a more gradual phased transition to the upcoming repeal of VAT benefits regarding the exclusive rights to Russian computer programs and databases,” also notes Chairman of the State Duma Committee on Budget Andrey Makarov.

The Ministry of Digital Development in a news update regarding the maintenance of benefits thanked industry leaders who prepared documents justifying the refusal to introduce VAT for developers. It also highlighted industry IT associations — RUSSOFT, "MIT — WeIT," and APKIT, which previously sent letters requesting the preservation of benefits to Prime Minister Mikhail Mishustin and State Duma Speaker Vyacheslav Volodin.

Additionally, on Tuesday, a similar letter was also sent to Mishustin from the Organization for the Development of the Video Game Industry (RVI).