Weekend jaunts to Russia as a shopping destination? That’s what is now on the cards as Russia has introduced a whopping 18 percent tax refund on items purchased in Russia provided they amount to more than Rubles 10,000 (US$170). The incentive kicked in from January 1. The 18 percent is deducted from the full purchase price upon provision of a receipt.
However, the tax refund system does not cover the products charged with excise tax, such as alcohol, tobacco, and cars, among others. Further, the Russian government is entitled to add or remove the type of products covered by the tax free system. The system has been immediately deployed in Moscow, Sochi, and St. Petersburg, the most popular tourist destinations in Russia, as well as in the Far Eastern Primorsky Territory, including Vladivostok. It is expected to be rolled out across Russia from October 2018, when the electronic document management system is expected to be introduced. It does not apply to residents of the Eurasian Economic Union as these goods are already traded duty free between the member states.
Refunds will be provided, in foreign currency, following the verification of legitimate tax purchase receipts at refund kiosks at the relevant Russian ports and airports.
Chris Devonshire-Ellis of Dezan Shira & Associates states: “Russian furs and caviar are obvious choices for foreign tourists, however, Russia also has a thriving electronics industry and is well known for its high fashion, jewelry and watches as well as its excellent sea food. There will be plenty of choices for foreign travelers to take advantage of this tax refund scheme, and will help boost the Russian economy as well as provide bargains. The Ruble has dropped to half the previous value of the Euro and Dollar, and an additional 18 percent discount means there will be significant bargains to be had.”
|Commodity||Purchase Price (US$)||Saving after Tax Refund|
|Full Length Mink Coat||8,750||1,575|
|Alena Gorchakova Earrings||7,800||1,400|
|1ct Yakutia Diamond||3,750||675|
|1kg Ossetra Caviar||2,400||432|
|Alena Akhmadullina Dress||1,800||324|
|Strela Russian Watch||527||95|
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