Russia: VAT requirements under new system for tracing goods

Russia: VAT requirements under system for tracing goods

The president of the Russian Federation on 9 November 2020 signed Federal Law No. 371-FZ that introduces measures relating to a national system to allow for the tracing of goods.


The new rules have an effective date of 1 July 2021.

This new system involves monitoring the turnover of certain types of goods using their batch registration numbers (BRN). Taxpayers engaged in transactions with traceable goods will be required to add BRNs to their value added tax (VAT) invoices and primary accounting documents and then provide the tax authorities with information on the transactions involving the traceable goods by filing VAT returns and related transaction reports.

The list of traceable goods, the procedure for providing documents, and other aspects are to be provided by the government. The list of traceable goods contained in a draft resolution includes:

  • Refrigeration and freezing equipment
  • Industrial trucks
  • Washing and drying machines
  • Monitors and projection equipment
  • Baby strollers and child safety seats
  • Integrated electronic circuits and elements

KPMG observation

Companies involved in any of the identified transactions need to develop internal processes and IT systems to support the traceability of goods, including the ability to add BRNs to their VAT invoices and other primary accounting documents. They also need to prepare to comply with the requirement to file reports under the to-be-issued requirements. One consideration for companies is to switch to electronic document flows, at least for issuing and receiving electronic VAT invoices.

Companies need to prepare for consequences resulting from the traceability of goods as a new instrument for controlling VAT and other tax and customs payments, including: (1) to provide VAT invoices and other documents if the tax authorities identify inconsistencies relating to the traceable goods during a desk tax audit; and (2) to pay additional tax liabilities assessed if the tax authorities identify underpayments of VAT or customs duties.


For more information, contact a KPMG tax professional:

Philippe Stephanny | +1 202 533 3082 |

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