Changes in Russian Tax Legislation

The Russian Ministry of Finance has submitted a package of bills to the Government of the Russian Federation proposing amendments to the Tax Code of the Russian Federation, which include the following:

• Increase in the standard VAT rate from 20% to 22%. At the same time, the 10% rate remains for all socially important goods such as food, medicines and medical products, goods for children, etc.;
• Reduction of the income threshold for taxpayers using the Simplified Tax System (STS) from RUB 60 mln to RUB 10 mln. Exceeding this threshold will require these taxpayers to start paying VAT;
• Optimization of preferential insurance contribution rates for SMEs: common tariffs will be applied for a number of sectors (trade, construction, mining, etc.) (30% up to the limit base and 15% over the base). At the same time, the reduced insurance contribution rate will still apply to priority SMEs sectors (processing, manufacturing, transport, electronics, etc.);
• Introduction of an obligation for commercial companies that pay insurance contribution to calculate contributions on payments and other remuneration in favour of part-time/nominal CEOs based on minimum wage levels when such employees receive wages below the minimum wage;
• Changes to the taxation procedure for bookmakers.

If the proposed amendments to the Tax Code of the Russian Federation are adopted in 2025, they will likely come into force on January 1, 2026.