VAT (Value Added Tax, known as NDS in Russia) is one of the main indirect taxes in the country. It is charged at every stage of production and sale of goods and services. Accurate VAT calculation is critically important for any business's accounting.
VAT Rates in 2025
Russia has four VAT rates:
- 20% — the standard rate, applied to most goods and services.
- 10% — for essential food products, children's goods, books, medical devices, and medications.
- 7% — introduced in 2025 for certain categories of taxpayers on the Simplified Tax System (USN).
- 5% — a reduced rate for USN taxpayers with a specific revenue level.
VAT Calculation Formulas
There are two basic VAT operations:
Adding VAT (on top)
When you know the amount excluding VAT and need to calculate the total price with tax:
VAT = Amount × Rate / 100
Total with VAT = Amount + VAT
Example: a product costs 10,000 ₽ excluding VAT, rate is 20%. VAT = 10,000 × 20 / 100 = 2,000 ₽. Total with VAT = 12,000 ₽.
Extracting VAT (from total)
When you know the total amount including VAT and need to determine the tax portion:
VAT = Total with VAT × Rate / (100 + Rate)
Amount excluding VAT = Total with VAT − VAT
Example: an invoice for 120,000 ₽ including 20% VAT. VAT = 120,000 × 20 / 120 = 20,000 ₽. Amount excluding VAT = 100,000 ₽.
Who Pays VAT
VAT must be paid by organizations and individual entrepreneurs on the General Tax System (OSNO). Entrepreneurs on the Simplified Tax System (USN) are generally exempt from VAT, except when certain revenue thresholds are exceeded.
Conclusion
Accurate VAT calculation is a mandatory requirement for proper bookkeeping. Use our VAT calculator to instantly add or extract tax at any rate.
