From 2026, a major change takes effect: all taxpayers using the simplified tax system, including individual entrepreneurs and organizations, are generally recognized as VAT payers. However, actual VAT payment depends on income thresholds.
1. Cases where VAT is not payable (from 01.01.2026)
The key condition is that income for 2025 did not exceed 20 million rubles.
In this case, VAT exemption is granted automatically, without notifying the tax authorities. There is also no obligation to file VAT returns or maintain VAT purchase and sales ledgers.
The exemption does not apply if the taxpayer acts as a VAT agent or imports goods into the Russian Federation.
2. Cases where VAT must be paid (from 01.01.2026)
If income for 2025 exceeded 20 million rubles, the taxpayer becomes a full VAT payer from 1 January 2026.
Transactions not subject to VAT under Articles 146 and 149 of the Tax Code are not taxed but must be reported in Section 7 of the VAT return. Filing the VAT return is mandatory.
The income threshold will be reduced and reviewed annually:
3. Exceeding the threshold during 2026
If income for 2025 was within the threshold and VAT was not paid at the beginning of 2026, but cumulative income during 2026 exceeded 20 million rubles, the obligation to pay VAT arises from the first day of the month following the excess.
The first VAT return must be filed for the quarter in which the obligation to pay VAT arose.
Therefore, taxpayers under the simplified tax system must closely monitor their income, as thresholds will be reduced and mid-year transitions to VAT are subject to strict rules.
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