The government is considering the possibility of prohibiting direct payment of applications from Russian bank cards and charging VAT at the place of purchase. Market experts shared with App2Top.ru their predictions of what this could lead to.
This morning, the Vedomosti newspaper wrote about the possibility of banning payment for applications. According to her sources, the issue of additional taxation of foreign Internet companies, within the framework of which the ban is being discussed, did not arise before the government by chance.
The fact is that at the moment, Europe is thinking about the possibility of tightening tax legislation against American technology companies. The reason is simple: wanting to get away from high rates, digital giants pay taxes in European countries with the lowest tax burden.
Against this background, on the background of the crisis in the Russian economy, and perhaps also on the background of the scandal with the company ”Yandex”, which appealed to the Federal Antimonopoly service with a complaint against Google, which prohibits its partners to set on your Android device services competitors, officials decided to look at the activities of the largest Internet companies in the Russian market.
The conclusion they made during the meeting in the presidential administration was the following: Apple and Google are underpaid to the treasury of Russia. There is no need to be surprised here, since purchases by Russian users in digital stores (App Store, Google Play, Steam) are not taxed in any way. According to Vedomosti, purchases are made directly from foreign companies.
And the main question that officials are now facing is what exactly to do about these companies.
They say that the decision will be made after a “public discussion”, but already during the meeting in the presidential administration, officials offered various ideas. One of them was to ban direct payment of applications from Russian bank cards, so that VAT on virtual purchases would be collected at the place of purchase.
We, in turn, asked a number of experts to answer the question: if such an initiative is introduced, how will it affect the Russian gaming market?
Alexander Kozhevnikov, Director of Business Development at Fabrika Online
For the Russian market, the introduction of such legislation will have a bad effect on two levels.
Firstly, it will be necessary to change the conditions of working with users, and some applications may lose most of their turnover in the Russian Federation, in addition, confidence will be consolidated that the Russian government wants to increase the number of prohibitive measures and regulate the online commerce market, which will negatively affect the investment climate.
Pavel Ryakkonen, Executive Director of Nevosoft
In general, the desire to receive some taxes from actual sales made in Russia is understandable.
In my opinion, this looks like a completely predictable development of events, because it turns out that Western companies conduct economic activities on the territory of Russia, sell their products and services on the Russian market, but do not pay any taxes for it. From this point of view, the desire of the state is understandable and justified.
Plus, the interest of the Russian authorities in this issue is not some local invention, but a general trend in the field of regulating the sale of digital content.
A source from the legal community who wished to remain anonymous
This initiative, in my opinion, is unrealistic in principle.
But even if it is suddenly introduced, it will be reflected directly in the computer games market in the way that the procedure for paying for applications and in-game content may become more complicated, and a local change in the principles of monetization for Russia may be required. In any case, these difficulties will be temporary – up to the moment of adaptation of the electronic payments market to the new situation.
Ksenia Schneeweis, product marketing manager for Zillion Whales
Taxation in the global digital economy is a headache not only for Russian officials.
The Old and New World have been thinking about this problem for a long time.
It should be understood that the article deals with the taxation of Internet companies. Banning payment from cards is just one of the possible solutions, and quite inconvenient from the point of view of both users and the state.
At the same time, some European countries have adopted the necessary laws that regulate tax issues directly between the state and the company. We believe that the introduction of a ban on direct payment of applications from the cards of Russian banks will have two possible consequences.
On the one hand, we have recently begun to get used to the idea that buying apps and games is not such a crazy idea – and then only because it has become easy, and games are cheaper in price terms. The change in the exchange rate and additional taxes, together with the complication of payment, will lead to the fact that Russian users will start pirating again, as in the good old 90s.
On the other hand, this ban may also result in success for Russian payment networks as a whole. Since the beginning of the two thousandth, Russians have become accustomed to using local payment systems, like YAD or Qiwi. The very fact that companies such as Apple or Google are in no hurry to connect alternative payment methods for countries where the penetration of bank cards is historically lower than in developed countries, obviously reduces the potential amount of possible income. Thus, the introduction of such sanctions will be able to push the mobile gaming market back for a while, but it may also become the first “bell” for application stores to introduce local payment services, which, in turn, after a while, can significantly increase revenue due to ease of use not only in Russia, but also in other countries.
In general, since most Russian companies make mobile games for the global market, the introduction of such a ban should not have a strong impact on developers.
A representative of a Brazilian company who wished to remain anonymous
I would compare this situation with the one that exists in Brazil today.
There is a ban on payments with Brazilian cards within the framework of foreign processing.
How does it work? Since the end of 2012, Brazilian banks have been banned by the local Central Bank from servicing international transactions without the presence of a card (a type of bank payment card transactions in which the cardholder with his card is not physically present at the time and place of payment) on cards issued by them.
If a Brazilian comes to another country and pays there with a card in a cafe, everything works. If he tries to pay online, and the processing is foreign, then with 90% probability his bank will reject this transfer.
As a result, everyone, including Google, is forced to use the processing of local banks. But, importantly, all transfers still take place via VISA and MasterCard – without involving any of their payment systems. Just cards issued by local banks.
Brazil wants the money to be collected domestically, and then introduced abroad, with the payment of all taxes, etc.
If similar measures are introduced in Russia, the main change is likely to be an increase in prices for digital goods, as happened in Europe, starting from January 1, 2015.