One of Russian President Vladimir Putin's top advisors is looking to raise taxes on digital purchases made in Apple's App Store and iTunes Store, along with Google's Play Store. German Klimenko, a Russian businessman, and the recently-appointed Internet czar for the country, is calling for an increased value-added tax (VAT) of up to 18% to be applied to digital purchases. The proposal would impact not just Apple and Google, but other non-Russian companies as well.
Klimenko, 49, is pushing to raise taxes on U.S. companies to help level the playing field for Russian competitors such as Yandex and Mail.ru. His efforts mirror those of governments across Europe and beyond to squeeze more revenue out of Google, Apple and other multinationals with increasingly complex billing and ownership structures.
Product categories affected by these new taxes include games, movies, and ads. Currently, VAT is charged on digital goods created by Russian companies, an issue that foreign businesses like Apple and Google don't have to deal with.