New personal income tax rates will be applicable from 2025 in Russia

Federal Law No. 176-FZ of July 12, 2024, introduced important changes to the Russian Tax Code regarding personal income tax. The new rules will come into effect on January 1, 2025.

The law introduces a progressive tax scale for personal income tax.

The following rates will be applied to salaries and other income that form the main tax base, as well as to a number of other incomes of resident taxpayers from January 1, 2025:

• 13% — for income up to 2.4 million rubles per year;
• 15% of the amount exceeds 2.4 million rubles but not more than 5 million rubles per year, plus 312,000 rubles of fixed tax (the tax amount calculated from the income of RUB 2.4 million at 13%);
• 18% of the amount exceeding 5 million rubles, but no more than 20 million rubles per year, plus 702,000 rubles fixed tax (the tax amount calculated on income of 2.4 million rubles at 13% and on income of 2.6 million rubles at 15%);
• 20% of the amount exceeding 20 million rubles but no more than 50 million rubles per year, plus 3,402,000 rubles fixed tax (the tax amount calculated on the income of 2.4 million rubles at 13%, on the income of 2.6 million rubles at 15% and on the income of 15 million rubles at 18%);
• 22% of the amount exceeding 50 million rubles, plus 9,402,000 rubles fixed tax (the tax amount calculated on the income of 2.4 million rubles at 13%, on the income of 2.6 million rubles at 15%, on the income of 15 million rubles at 18%, and on the income of 30 million rubles at 20%).

The list of incomes taxed according to the new progressive scale does not include certain types of income. In particular, income from equity participation (including dividends), income from transactions with securities, and derivative financial instruments are excluded.