Russia introduces a phased reduction in the income thresholds triggering VAT obligations for small and medium-sized enterprises (SMEs). From 2026, VAT applies once annual income exceeds 20 million rubles; from 2027, the threshold is reduced to 15 million rubles; and from 2028, to 10 million rubles. Once the threshold is exceeded, SMEs must pay VAT either at reduced rates of 5% or 7%, or at the standard rate of 22%. This change increases the fiscal burden on SMEs by expanding the number of firms subject to VAT and raising their effective tax liabilities.
