Russia eliminates VAT on non-Moscow domestic flights

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Russian President Vladimir Putin

Amendments to the Russian tax code that set a 0% value-added tax (VAT) on domestic flights, excluding those to and from Moscow, were signed by President Vladimir Putin June 6.

The new rate will go into effect in July.

The VAT on domestic flights was reduced from 18% to 10% in 2015. Later, authorities introduced a 0% rate for routes connecting the Russian far east, Kaliningrad and Simferopol (Crimea) with other cities, including Moscow and nearby airports.

Authorities said the measure is necessary to support and develop direct routes connecting different regions of Russia. In 2018 Moscow airports—Sheremetyevo, Domodedovo and Vnukovo—handled nearly half of all passengers in Russia. Regional airports have reported some growth in non-Moscow traffic, but further increases are being sought.

Source: ATW

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