Business against 22% VAT: the introduction will kill cross-border trade

Business against 22% VAT: the introduction will kill cross-border trade
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The Association of e-commerce Participants opposed the immediate introduction of full VAT on cross-border e-commerce. According to business estimates, the one-time introduction of a 22% rate from 2027 will destroy the economics of the cross-border sales model and squeeze out a significant part of sellers of imported goods from the market.

While the Ministry of Finance is promoting the phased introduction of VAT on imported goods from marketplaces, a fierce discussion is unfolding within the industry about the pace and rates. And business has serious arguments.

The Association of e-commerce Participants stated that the introduction of a full rate of 22% from 2027, which the Ministry of Industry and Trade and offline Retail insist on, will make cross-border trade unviable. The logic is simple: The marginality of most categories of imported goods is already in the range of 5-12%. With the addition of 22% VAT, pricing will have to be radically changed — either sellers will leave the market, or the buyer will receive a sharp increase in prices.

Offline retail looks at the situation in exactly the opposite way. As long as foreign sites do not pay VAT, they compete on obviously privileged terms. Russian stores include 22% in the price of each product, but foreign sellers do not do this through marketplaces.

The Ministry of Finance has taken an intermediate position: three years of smooth growth gives time to adapt without destroying the market all at once. The Ministry of Economic Development additionally proposed to make an exception for socially significant goods — children's, medical, food — with reduced rates.

The final version of the bill may still change. The key word now is "sent to the government," not "accepted." Consideration, approval, and the State Duma are ahead. The business has a window to influence the final parameters.

There is only one practical conclusion for importers: even under the phased scenario of the Ministry of Finance, the 7% rate from 2027 already requires a recalculation of the economy for each commodity item. There is no need to wait for the adoption of the law for this.