Russian lawmakers propose a new 18-percent tax on foreign-developed apps

Russian lawmakers have introduced draft legislation that would levy a tax on the purchase of content and software from foreign IT companies. In particular, the tax would apply to the App Store and Google Play online stores, where Russian customers currently pay no sales taxes. Lawmakers say the new legislation could bring in tens of billions of rubles in tax revenue annually. 

The law would add a sales tax to any purchases of content or software sold by foreign developers. Content and software designed in Russia would also be subjected to a value-added tax, removing current exemptions for Russia's homegrown developers, though lawmakers are offering Russian companies various compensations and preferences to offset this burden.

The legislation's explanatory note says Russian consumers today prefer buying foreign software because it's taxed less than Russian software. Lawmakers are proposing an 18-percent tax on foreign-made apps. If adopted, the law would take effect on January 1, 2017.