Russia Boosts Catering Sector With Major Tax Code Changes
The Russian government has announced significant changes to the Tax Code, set to take effect in October 2025, that will impact the catering sector. These changes aim to boost the industry, which had a turnover of 3.44 trillion rubles in 2024 with around 198,000 establishments.
The VAT tax-free threshold for businesses in the catering sector will increase from 2 billion rubles to 3 billion rubles. Additionally, businesses providing catering services through various outlets are exempt from VAT, provided they meet specific revenue and wage criteria. To qualify, a company's catering revenue must be at least 70% of its total revenue, and its average monthly wage must meet the regional industry average. The VAT exemption is automatic, but companies can choose to pay VAT by filing a waiver application.
Food delivery has become a strategic approach in the industry, with the government also introducing a permanent reduction of the VAT rate on food from 19% to 7% for restaurants and catering services, effective January 1, 2026. Beverages will remain taxed at 19%. Catering industry businesses must now intuit whether avoiding VAT and lower-paid staff is more beneficial than forgoing the exemption.
The Russian catering industry, projected to reach 218,000 establishments by 2030, stands to benefit from these tax changes. The increased VAT tax-free threshold and VAT exemption for qualifying businesses, along with the reduced VAT rate on food, aim to stimulate growth and competitiveness in the sector.
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