Q&A: Certification and Import in the Russia – Kazakhstan – Belarus Customs Union

1. I’m working with a Russian business partner who is a member of the Customs Union and they are asking me to sign extra documents. Why?

From the perspective of your Russian partner, the tax code requires that completed works and services be evidenced by signed “acts” as these are the primary documents used to record revenue and expense. Therefore, at different stages of your work, you may be asked to sign these documents simply to satisfy the requirements of the Russian tax code.

2. I’ve sold services to our Russian business partner and now I’m being asked to provide a copy of my company tax registration document and it should be apostilled. Why?

Under Russian legislation, in the absence of a double taxation avoidance treaty, Russian-sourced income is taxed at the source which means your Russian partner should withhold taxes from your payment. However, to enjoy the benefits of the tax treaty, the Russian tax office requires that you demonstrate your eligibility by providing a copy of your tax registration certificate to your client. The apostille is simply a protocol that countries follow to recognize the legitimacy of documents between different countries.

3. Can I deliver goods to Russia myself without a presence in Russia?

Only a Russian legal entity is able to import goods, i.e. to declare them at the customs office in Russia. For this reason a foreign importer needs to sell the goods to a Russian partner or distributor, who takes care of the customs formalities. Another option for foreign businesses is the set up of a subsidiary in Russia, which can handle all kinds of import operations.

4. I tried to send marketing materials free of charge to my business partner in Russia, but they have been blocked at the customs office. Why?

Once the customs value of free samples, catalogues etc. exceeds 200 Euro the goods need to be declared, and customs duties, customs fee and import VAT need to be paid. Even if products are free of charge the invoice must report the real value of the goods and the usual set of documents needs to be presented to the customs authorities.

5. Can I use certificates of other Russian distributors for the same products?

Conformity declarations and most of the TR conformity certificates are issued in the name of the Russian importer of the goods. In this case only the Russian applicant body can import the goods under the respective declaration or certificate. Only a conformity certificate that is issued on the manufacturer may be used for customs clearance by different importers.

RUSSIA CONSULTING has been consulting and supporting foreign clients in St. Petersburg since 2004. The company has been instrumental in helping foreign investors to set up businesses in the city and handle local economic conditions. On-the-ground presence and years of business experience in the given city are essential to giving sound advice on foreign investment. RUSSIA CONSULTING can provide you and your organization with an in-depth understanding of business set-up, business consulting, taxation, accounting, recruiting, basic legal matters, IT services, set-up of internal control systems, adapted to the local environment. Furthermore, we can provide you with office space, a local general director, or finance and tax due diligence.