Legislation updates 2024

Let us pay your attention on the latest Russian legislation updates for 2024

Minimum wage in Russia
From January 1, 2024, the minimum wage in Russia will be 19,242 rubles. For Moscow, the minimum wage is 29 389 rubles.

Federal Law No. 548-FZ of November 27, 2023

Remote employees — taxation
The income of remote employees who work under employment contracts with a Russian company or a division of a foreign company registered in Russia will begin be recognized as income from sources in Russia. The standard personal income tax rate will be applied to such income regardless of the number of days in Russia (tax residence status of employees). The standard tax rate is 13% 15% for income over 5 million rubles annually.

Federal Law No. 389-FZ of July 31, 2023

Personal income tax
From January 1, 2024, employers in Russia will have to pay personal income tax and report the tax paid twice a month. The employer will submit a report on paid taxes and pay personal income tax twice a month instead of once a month. The new dates are the 5th and 28th of each month. In December of each year, starting from 2024, tax should be paid three times: on the 5th, 28th, and the last working day of the year — personal income tax calculated and withheld from December 23 to 31 must be transferred to the state budget no later than the last working day of the year.

Employers will be required to submit notifications of the amounts of personal income tax calculated and withheld by them from the 1st to the 22nd of the current month on the 25th of the current month. Notification about the amounts of taxes on personal income calculated and withheld by tax agents for the period from the 23rd day to the last day of the current month must be submitted no later than the 3rd day of the following month. A particular procedure will apply for December payments. Notification of the amounts of taxes on personal income calculated and withheld by tax agents for the period from December 23 to December 31 must be submitted no later than the last working day of the calendar year.

Federal Law No. 539-FZ of November 27, 2023

Transfer pricing
Fines for failure to submit transfer pricing reports will increase significantly for companies If a company fails to submit notifications of controlled transactions completed in a calendar year to the Tax Authorities on time or the notification contains false information, the fine will be 100,000 rubles (instead of 5,000 rubles). If the company fails to submit a notice of participation in an international group of companies (CbC notification) within the prescribed period or provides false information, instead of 50,000 rubles, the company will pay a fine at the new rate of 500,000 rubles for each violation.

In case of failure to submit a CbC report on time or submission of a country report containing false information, the fine for the company will be 1,000,000 rubles for each violation (instead of 100,000 rubles) Also, for failure to submit national documentation (Local File) and global documentation (Global File) within the prescribed period, the fine for the company has been increased to 1,000,000 rubles (today, this fine is 100,000 rubles).

Federal Law No. 539-FZ of November 27, 2023

The new size of the maximum limit base for 2024
The new maximum value of the base for insurance contributions is 2,225,000 rubles. It is determined on a cumulative basis from the beginning of the year. The maximum value of the base affects the calculation of contributions. If the employer applies a standard rate, then 30% is applied to payments within the maximum value base; once it exceeds the maximum value base, the rate will be 15.1%.

Decree of the Government of the Russian Federation of November 10, 2023, No. 1883

New limits for simplified tax system
The deflator coefficient for the simplified tax system for 2024 was set at 1,329. A company using the simplified tax system can calculate tax in 2024 at regular rates until their income exceeds 199.35 million rubles. Increased rates in 2024 must be applied for incomes from 199.35 million to 265.8 million rubles. The company will be able to switch to the simplified tax system in 2024 if its income for the nine months of 2023 does not exceed 149.5 million rubles.

Order of the Ministry of Economic Development dated October 23, 2023, No. 730

New report when paying income to foreign companies
Russian companies and permanent establishment offices that pay income to foreign recipients report to the Federal Tax Service using a special reporting form. The new form of tax report on the income paid to foreign companies and taxes withheld will be applied, starting with reporting for 2023.
The form has been supplemented with two new sections: information on paid income not subject to taxation (except for the sale of goods), and information on paid income from the sale of goods. Thus, starting with reporting for 2023, it will be necessary to submit a report on payments to foreigners for goods supplied and other non-taxable income paid.
For 12 months of 2023, the form should be submitted by March 25, 2024.

Order of the Federal Tax Service No. ED-7−3/675@ dated September 26, 2023

Updated reports
From January 1, 2024, several reports will change: 6-NDFL, 3-NDFL tax return for individuals, Report on insurance contributions, Simplified tax system tax return, tax report on the amounts of income paid to foreign companies, and the amounts of taxes withheld.

15% withholding tax on income paid to foreign affiliates for service
The list of income related to the income of a foreign company from sources in Russia and subject to taxation has been expanded. From January 1, 2024, a 15% withholding tax will be introduced on income paid to foreign affiliated parties for the performance of work and provision of services.
If a Russian company in 2024 pays for any services of a foreign company from the same group and which is affiliated, then the Russian company will have to withhold 15% tax at source.

Federal Law No. 539-FZ of November 27, 2023

Foreign employees

The main changes affected the following points:

The minimum wage level for highly qualified specialists (HQS) has changed.

According to the changes from March 1, 2024, the minimum wage will be 750,000 per quarter.
Following information about the minimum wage for HQS employees, please note that according to the Ministry of Internal Affairs explanation, the salary should be 750,000 rubles per quarter starting Q1 2024. It means that starting January 2024, increasing salary and making it 250,000 rubles per month will be necessary.

Residence permit of an HQS employee.

Changes in legislation will allow an HQS employee to obtain a residence permit without an expiration date. Such a residence permit can be issued only after the employee has worked for two years on a residence permit issued based on his work permit as an HQS.
Such residence permits will be issued 180 days after the publication of the law, that is, from January 2024.

Deadlines for obtaining a work permit.

From July 10, a foreign HQS is required to collect his work permit within 30 days from the date of the decision to issue it. Otherwise, it will be destroyed, and the decision annulled. The period can be extended for good reason at the request of the employer.
According to the previous rules, the period within which a foreign HQS had to apply to the Ministry of Internal Affairs to obtain a work permit was not regulated by law.
The same period, 30 calendar days, is also established upon receipt (issuance) of a work permit upon its renewal;
The new law also establishes the deadlines during which a foreign HQS who has not received a work permit within 30 days, as well as members of his family, are required to leave the territory of Russia. A highly qualified specialist and members of his family who have no other legal grounds for staying (residence) in the Russian Federation are required to leave the Russian Federation within 15 calendar days from the date of expiration of the period for obtaining a work permit. Visas issued to a highly qualified specialist and members of his family after the expiration of the specified 15 calendar days are considered invalid.

Federal Law No. 316-FZ of July 10, 2023

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