Russia’s new government internet advisor German Klimenko is pushing to raise taxes on US companies such as Google, Apple and Microsoft, in order to level the playhing field for Russian competitors such as Yandex and Mail.ru. In an interview with Bloomberg, Klimenko isaid he was putting his support behind a bill that would apply an 18 percent value-added tax to the total revenues that Google, Apple and other foreign companies earn each year in Russia, estimated at around RUB 300 billion (USD 3.9 billion).
The bill lists a dozen categories of digital products and services on which domestic companies currently pay VAT but foreigners for the most part don’t, including ads, games, movies, marketplace transactions and cloud computing. The proposed amendment to the tax code is one of many being debated by lawmakers seeking new sources of revenue to help the biggest fiscal deficit in six years, caused mainly by plunging oil prices and sanctions over Ukraine.
Security is another issue. Google, for example, which can track “everything,” responds to 32,000 requests a year from U.S. law-enforcement agencies but it won’t answer one from Russia, according to Klimenko. “We have to consider this as a kind of potential threat to our national security,” he said.
Google, Apple and Microsoft all declined to comment.
