|Research by Country/Region
January 16, 2018
|RUSSIA: CUSTOMS, TAXES, and DOCUMENTATION REQUIREMENTS: IT PRODUCTS and SERVICES IMPORTS |
A. Is this country a member of the Information Technology Agreement?
B. Customs documentation requirements for IT products
C. Software: duties and taxes, updates, licenses, electronically delivered
D. IT services: tax treatment and other regulations
E. Refurbished, used, or repaired computer equipment imports
A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here.
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS
What are the documentation requirements for the physical import of software? For other information technology products?
The list of documents necessary from the foreign partner in order to import software and other IT products includes:
b) invoice, which should include the following information: the quantity of goods, gross weight, net weight, its full description, customs code (it is better to coordinate this with the Russian partner, since the Russian HS code system is slightly different from the U.S. system) , the amount of the invoice, reference to the contract (number of contract, date of contract), shipment information, and terms of delivery
c) certificate of conformity or certificate of origin might be requested by the Russian company if they are in turn requested by customs.
However, this is on a case-by-case basis, since the customs authority might disagree with the value indicated in the invoice and declare a different value. Thus, it can be very useful to provide the Russian partner with the following documents confirming the price of product:
a) product price-lists (any promotional brochure will be fine), or
b) a copy of the export customs declaration with the stamp of the exporting country’s customs authority.
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED
DUTIES AND TAXES ON SOFTWARE IMPORTS
Are duties assessed on the intellectual property of the software or on the medium on which is it presented?
The duties are assessed both on the intellectual property and the medium on which it is presented. These duties and taxes are applied to software based on the cost indicated in the invoice. This cost is supposed to be based on authors’ royalties and the cost of the license itself. It is better to split these costs in the invoice.
Are taxes assessed on the intellectual property of the software or on the medium on which is it presented?
The import tax is 15% and it is assessed on the total cost of the intellectual property and the medium. These duties and taxes are applied to software based on the cost indicated in the invoice. This cost is supposed to be based on authors’ royalties and the cost of the license itself. It is better to split these costs in the invoice.
Is customized software treated differently than packaged software?
Customized and packaged software are treated similarly.
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IMPORTS OF SOFTWARE UPDATES
What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice? Are duties and taxes paid on that amount? What happens when the updates are sent at a later date? Are duties/taxes applied again? If so, based on what value? How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
The duties and taxes are paid for each update separately. These duties are based on the value indicated in the invoice, which is supplied with the update. It is better not to include the price of updates into the original invoice, because later updates will be taxed anyway. So, unfortunately, the company will have to pay import taxes for each update separately.
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SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER
Are software licenses classified in Harmonized System 4907?
Software licences are not classified in the Harmonized System. They are treated as documentation needed as part of customs procedures, but not as part of the product. Hence, they are not taxed.
Are import duties/taxes applied? If so, on what cost/price base are they levied?
Are withholding or other additional taxes applied on software licenses? If yes, how?
If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market? If so, would U.S. or local laws pertain?
If the U.S.. license agreement is included in the packaging of the installation/registration of shrink wrapped software, this agreement will be binding on consumers in the Russian market. In this case the U.S. law will pertain, but there will be difficulties with the enforcement of the U.S. law in Russia.
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SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE
Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
According to the law, it should be taxed, although the Internet is widely used to avoid import taxes. However, if someone wants to import software legally, though the importer may receive the software through the Internet, the regulations will be applied as if it were physically shipped into the country. In this case, the medium with software should also be presented at customs along with documentation and the license.
Would the situation be different if this software were instead delivered to a distributor who has a license to produce (replicate) and sell the software?
What are the documentation requirements for the electronically delivered import of digitized products (i.e. software, movie downloads) over the Internet or other networks?
Currently, import via the Internet is not controlled by customs. However , theoretically, such imports are subject to import taxes and duties. Hence, if, for some reason, it is necessary to declare the electronically delivered digitized product, the same standard package of documents should be provided by the foreign partner, and the physical medium should be presented as well.
Must an electronically delivered software import be accompanied by a physical shipment of the same product?
Yes. Any software delivered across the border into Russia should be accompanied by a physical shipment. Even if the software was delivered over the Internet, while doing customs clearance, the physical shipment will be required.
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D. IT SERVICES: TAX TREATMENT AND OTHER REGULATIONS
Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
According to the Russian Customs Code, the services are not subject to import duties or taxes. However, if their cost is included in the contract of the overall software purchase, then the taxes will be applied to the total cost. Hence, it is recommended that the company conclude a separate contract for the services.
Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
U.S. information technology companies are allowed to send their personnel to Russia.
Are special visa, work permits, and/or professional certification by an accredited body required?
If a Russian company pays the U.S. company in the United States, then no work permissions or special visas are required for the U.S. company’s specialists to come to work in Russia. However, if the Russian company pays for these specialists in the territory of Russia, this would require that the local labor law be observed, and thus they would need to have permits and special visas.
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E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS
1. REFURBISHED COMPUTER EQUIPMENT
Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
The import of refurbished computer hardware is permitted. However, there is no established procedure for determining if the equipment is new or refurbished. The decision on this is basically made by the specific customs authority. The only way to influence his/her estimate is to provide a) price-lists indicating that the company is specializing in selling refurbished equipment, or b) a copy of the export customs declaration with the stamp of the exporting country’s customs authority.
How are duties and taxes assessed?
The same duties and taxes are assessed as on new equipment.
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2. USED COMPUTER EQUIPMENT
Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
The same rules are applied to used equipment as to refurbished equipment. See answers above.
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3. REPAIRED COMPUTER EQUIPMENT
Information on the re-import of repaired computer equipment.
The re-import of repaired computer equipment is one of the most complicated issues in Russia. The customs rules state that the repair requires a special customs regime, and, when the equipment is re-imported, the taxes are assessed on the cost of the repair, which was concluded outside the country. However, this process contains two very tricky aspects.
First, this "special customs regime” is established by the permission of a customs employee. In order to apply for this special customs regime, the company must collect an enormous amount of documentation. Following this, customs can take an entire month to make their decision. However, after this one-month period, they may tell you that you need to add one more piece of documentation to the previous package. Then, the one-month period begins anew. In the end, even after this second month, customs might refuse to give their permission for such a regime.
The second tricky aspect is that the re-imported device must have some characteristics that will make it possible to identify it with the device that was earlier taken out of the country. As an example, if a motherboard has been replaced during repair, customs could declare that the computer is an entirely different device.
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This response was prepared by the U.S. Department of Commerce/Commercial Service in St. Petersburg, Russia, in February 2003. For further clarification please contact:
U.S. Consulate General, St. Petersburg
Special Notes: The above information is intended to serve only as unofficial guidance. In seeking to obtain government rulings in specific cases, it will often be necessary to refer to special laws, separate regulations and announcements, and case-by-case decisions by the government. Beyond the general guidelines shown above, legal counsel should be retained at an early stage of consummation of a major procurement contract, and before entering into any legal commitments.
This page was last updated on 06/18/2009. This site is operated by the Office of Technology and Electronic Commerce (OTEC) division of the International Trade Administration, U.S. Department of Commerce.