Russia To Raise Income Tax Rate To 15% On Annual Earnings Over Rubles 5 Million
The Russian Government has submitted Bill No. 1022669-7 to the lower house of Parliament (State Duma), to increase the individual income tax rate on income earned over a specific threshold. The draft bill was submitted as part of the budget and was submitted on September 17.
The bill includes measures that would increase the individual income tax rate to 15 percent from 13 percent for amounts earned over 5 million Russian rubles (US$66,169) per year, effective Jan. 1, 2021.
Russian Finance Minister Anton Siluanov said “The draft laws are ready. We expect that they will be adopted during this autumn session. How many citizens will be subject to increased taxation? According to our estimates, their number will be no more than 1% of all working citizens.”
Siluanov stressed that for other categories of citizens, the terms for levying personal income tax will not change and that “not all income will be taxed at an increased rate, but only the part that exceeds 5 million rubles per year.”
| New Russia Individual Income Tax Band | |
| Earnings | Rate |
| to 5 million rubles | 13% |
| 5 million rubles and above | 15% |
| Example: Annual income of 10 million rubles, taxable portion will be 5 million rubles at 13% = 650,000 plus 5 million at 15% = 750,000, total tax bill: 1.4 million rubles. | |
Related Reading
- Russia Raises Tax Rates For High Earners, Reduces Taxes For I.T. Investors
- Russia & Cyprus Patch Up Tax Differences After DTA Withholding Tax Row
About Us
During these uncertain times, we must stress that our firm does not approve of the Ukraine conflict. We do not entertain business with sanctioned Russian companies or individuals. However, we are well aware of the new emerging supply chains, can advise on strategic analysis and new logistics corridors, and may assist in non-sanctioned areas. We can help, for example, Russian companies develop operations throughout Asia, including banking advisory services, and trade compliance issues, and have done since 1992.
We also provide financial and sanctions compliance services to foreign companies wishing to access Russia. Additionally, we offer market research and advisory services to foreign exporters interested in accessing Russia as the economy looks to replace Western-sourced products. For assistance, please email russia@dezshira.com or visit www.dezshira.com
