Tax system on the verge of massive transformation

The Russian Ministry of Finance has drafted major amendments to tax systems, which may come into force from January 1, 2025. Currently it is suggested to:

1. Increase the income tax from 20 to 25% (but keep discounts for special zones / regimes and socially important goods and services), cancel 0% income tax rate for IT companies (the preferential rate for them is expected to be 5% until 2027)
   
   
2. Increase the annual income limit for simplified tax system (STS) from current 265.8 mRUB to 450 mRUB
   
   
3. Charge VAT from companies using the simplified tax system, if their annual turnover exceeds 60 mRUB
   
   
4. Grant tax amnesty for business fragmentation in 2022-2024, if the company proactively abandons this practice in the next two years
   
   
5. Introduce progressive personal income tax scale, applying the increased rates to the amounts above the following thresholds:
   
   

• 13% rate will stay for income up to 200 kRUB/month
• 15% on 200–416.7 kRUB/month
• 18% on 5-20 mRUB/year
• 20% on 20-50 mRUB/year
• 22% on higher income

The State Duma will allegedly approve the novels by August 5.