The Ministry of Economic Development proposed to exempt tour operators from VAT until 2027

The head of the Ministry of Economic Development Maxim Reshetnikov proposed to exempt tour operators from paying VAT on tours in Russia from January 1, 2023 to 2027. This includes trips of Russian citizens and foreign tourists. Finance Minister Anton Siluanov called this proposal fair in the face of difficulties encountered by tour operators.

Maxim Reshetnikov recalled that in June a law was signed to zero VAT for hotels. It is valid until 2027. In this regard, the demand for investment in hotels has increased, the minister said. Previously, VAT was set to zero for railway and air transportation. The decisions were made in 2015 and 2019, respectively.

“Tour operators who buy hotel rooms in bulk and order transportation still pay VAT themselves. And it turns out that they have zero incoming VAT, and they have to pay 20% outgoing VAT on the total amount. VAT began to play the role of a turnover tax. And tour operators began to lose competition to small companies on the simplified taxation system or platform solutions to those who work on a simplified taxation system, and digital platforms,” Maxim Reshetnikov explained during a meeting on the development of domestic tourism chaired by Russian President Vladimir Putin (quote from Interfax) .

Mr. Reshetnikov called tour operators the backbone organizations in the tourism industry. In this regard, he believes that the adoption of this initiative will be an important step forward.

Anton Siluanov said that if this measure is taken, the reduction in the revenue base will be about 3-4 billion rubles. At the same time, he stressed that this decision will stimulate the tourism business.

In April 2022, the Association of Tour Operators of Russia applied to the government with a request to zero VAT. Tour operators have stated that VAT is becoming a significant burden for companies in difficult market conditions. Now tour operators are taxed at 20%. Public organization “Opora Rossii” in June 2022 reported that the zeroing of VAT for hotels will force tour operators to raise prices for their services. The organization also called on Anton Siluanov to reset VAT for tour operators.

Read more about the situation – in the material “Kommersant FM” “Tour operators offered to reset”.

Lusine Balasyan