Russian domestic tour operators to be exempt from VAT - draft law

The Government Commission on Legislative Activities has approved an initiative under which tour operators organizing trips inside Russia will be exempted from paying value added tax, Vladimir Gruzdev, chairman of the board of the Association of Russian Lawyers, and member of the commission, Azernews reports, citing Interfax.

"The bill was approved by a government commission. It proposes to exempt operations for the sale of tourism products related to domestic and inbound tourism from VAT. It is established that this rule will be applied for the period from January 1, 2023 through June 30, 2027 inclusive," Gruzdev said on Thursday.

He explained that this initiative would create conditions for lower prices for tourism products and, accordingly, increase the attractiveness of traveling in Russia.

"Domestic tourism today is one of the most dynamically developing industries. As was announced at the recent SPIEF, by 2030, a twofold increase in the tourist flow inside Russia is planned: from 65 million to 140 million people a year," Gruzdev said.

The implementation of the initiative will lead to a drop in budget revenues of about 4.2 billion rubles annually.