Changes for Business
The following changes are relevant for legal entities:
- Corporate Income Tax (CIT): The rate shall be increased from 20% to 25%.
- Exchange Rate Export Duties: These duties introduced on 1 October 2023 and applied when the USD exchange rate exceeds RUB 80, will be abolished from 2025.
- Mineral Extraction Tax: This tax may increase by 2-2.3 times for companies producing fertilizers and by 15% for companies producing iron ore.
- VAT Liability: VAT will be introduced for micro, small and medium-sized enterprises with annual revenues exceeding RUB 60 million, including those using the simplified tax regime (STS). However, STS will become more accessible as the income threshold will be raised from RUB 265.8 million to RUB 450 million per year.
Changes for Individuals
The Federal Law No. 176-FZ dated 12 July 2024 “On Amendments to Parts One and Two of the Tax Code of the Russian Federation, certain legislative acts of the Russian Federation and the invalidation of certain provisions of legislative acts of the Russian Federation” introduces of a five-step progressive personal income tax (PIT) scale:
- 13% for income up to RUB 2.4 million per year,
- 15% for the portion of income in the range from RUB 2.4 million to RUB 5 million per year,
- 18% for the portion of income in the range from RUB 5 million to RUB 20 million per year,
- 20% for the portion of income in the range from RUB 20 million to RUB 50 million per year,
- 22% for income over RUB 50 million per year.
These increased personal income tax rates will not apply to the entire amount of income but only to the portion exceeding the applicable threshold.