Russia's 2026 tax reforms raise VAT and end card payment exemptions
New tax laws came into force in Russia on January 1, 2026, bringing key changes to the financial sector. VAT exemptions for bank card servicing, processing, and acquiring services were removed, while the standard VAT rate rose from 20% to 22%. Officials have begun monitoring the early effects of these reforms on payment behaviour.
The Bank of Russia confirmed the end of VAT exemptions for card-related services in an interview with Alla Bakina, head of its National Payment System Department. She highlighted the changes as part of broader tax adjustments taking effect this year.
At the same time, the standard VAT rate increased to 22%, and the revenue threshold for small businesses on the simplified tax system was lowered. These reforms arrived as cashless payments dominated retail transactions, accounting for 88% of turnover in 2025, according to Interfax. By February 2026, the Central Bank reported no noticeable shift from cashless to cash payments following the tax changes. Governor Elvira Nabiullina urged caution in judging the reforms' impact, noting that early assessments could be misleading.
The tax reforms have now been in place for over a month, with authorities closely watching their influence on payment trends. While no immediate shift in consumer behaviour has been detected, further observation will determine the long-term effects on businesses and transactions.
