Federal Law No 303-FZ "Concerning the introduction of amendments to parts one and two of the tax code of the Russian Federation and certain legislative acts of the Russian Federation" was signed by the President on 3 August 2018 and was officially published. The law introduces an increase in the applicable VAT rate from 18% to 20% with effect from 1 January 2019.
The VAT rate increase will not affect the vast majority of the services provided within scope of a customary custody agreement, as VAT is not applied to basic and auxiliary custody services. Only services considered as "non-custody" (i.e. additional) and thus not legally considered to be in the scope of the custody agreement (e.g. tax refunds) will be affected. Such services should be specially marked in the applicable fee schedule or additional agreement as "subject to VAT".
Impact on investors: The VAT rate applicable to special services that legally fall out of the scope of the custody agreement will increase as of 1 January 2019.