On 16 November the State Duma adopted the law on tax free introduction in Russia. This system will allow foreign citizens who are not members of the Eurasian Economic Union to return the value-added tax when exporting goods from the country.

In order to receive compensation, foreigners need to purchase goods in the amount of 10 thousand rubles including tax and to take a bill. According to the Ministry of Industry and Trade, during one month from the law publication date, the tax free system will be organized on the basis of paperwork (necessary to show a paper bill), and it is expected that its implementation will be available in electronic form from 1 October 2018.

However, excisable goods (e.g. alcohol) will not be the subject to compensation. Moreover, other goods can also be excluded – the Government will form the final list. For the present, it is expected that the system will be implemented in Moscow, St. Petersburg and Sochi, but the Government will also determine the full list of cities.

According to Alexander Kurnosov, Deputy General Director of «Academservice»: «The tax free system in Russia is an important measure, this system already operates in many countries and the integration in it will allow Russia to become a full participant in the global economy and tourism business. The tax free system can also contribute to growth in consumer spending of foreign tourists in Russia and, accordingly, revenue growth of tourism, increase of deductions in budgets of all levels and the improvement in the trade balance of the country as a whole. However, it is necessary to understand that for classic foreign tourist this system will not be a key incentive to visit Russia, because our country is attractive to tourists not for the opportunity to buy some unique goods or services, but for its history, culture, exotic image».

The tax free system already operates in many countries and according to D.A. Medvedev, the Prime Minister of Russia, it is «an integral part of international standards of hospitality». Introduction of such system in Russia will allow increasing the number of tourists and the retail turnover amount, which will favorably affect the development of the whole country.