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RUIndividuals who spend at least 183 calendar days in the Russian Federation during 12 consecutive months are recognised as tax residents. For the purposes of determining the final tax status of an individual, a calendar year is considered (i.e. if an individual spends more than 183 days in the Russian Federation during a calendar year, he/she is recognised as a tax resident).If an individual spends less than 183 days in the Russian Federation, he/she will lose the status of a tax resident of the Russian Federation.
Taxation of income of tax residents of the Russian Federation
Residents pay tax on income received from sources in Russia and abroad. In determining the tax base, all income received by the taxpayer in cash or in kind or the right to dispose of which has arisen, as well as income in the form of material benefit, is taken into account.
Most income is subject to a progressive rate of 13%/15%. Tax residents can take advantage of tax deductions.
Basic tax rate
13% – if the sum of tax bases is less than or equal to 5 million RUB;
650 RUB thousand and 15% of the amount of tax bases exceeding RUB 5 million – if the amount of tax bases for the tax period is more than RUB 5 million
Employment income
Applicable rate 13% / 15%.
Residents are entitled to apply standard tax deductions (for privileged categories of citizens, as well as persons whose children are provided for) and social tax deductions (for persons who incurred expenses for medical treatment, education, fitness and health services, charitable purposes, additional pension measures and other socially important purposes).
Bonuses from employment
Applicable tax rate 13% / 15%.
Interest income
Interest income received from foreign sources is taxed at the rates of 13%/15%.
Aggregate interest income on deposits received in Russian banks is taxable to the extent that it exceeds the product of RUB 1 million and the maximum value of the key rate of the Bank of Russia in effect as of the first day of each month during the specified calendar year (in 2024 it is 21%).
Thus, the non-taxable income is RUB 1 million * 21% = RUB 210 thousand, only the amount of interest on all deposits of the resident for 2024 that exceeds RUB 210 thousand will be taxable. The excess amount is taxed at the rate of 13% / 15%.
Dividend income
The tax rate is 13% / 15%.
Income from the sale of securities
Income from the sale of securities is subject to personal income tax at the rate of 13% / 15%.
Income from the sale of shares of Russian and foreign organisations received in 2024 is exempt from taxation if the said shares have been held for more than 5 years, provided that no more than 50% of the assets of such organisations consist of Russian immovable property, and if the company is foreign, it must not be established in a country included in the ‘Black List’ of the Ministry of Finance of the Russian Federation.
A resident has the right to reduce income from the sale of securities by the expenses incurred by him, with both the amounts from the sale and the acquisition costs calculated in roubles.
Income from the sale of shares in Russian organisations
The tax rate is 13%/15%.
Tax residents may deduct expenses incurred for the acquisition of shares in Russian organisations.
At the same time, an individual can obtain exemption from taxation of income from the realisation of shares in Russian companies if they have been held for 5 years or more.
Income from the sale of property, including immovable property
This income is subject to personal income tax at the rate of 13%.
If Russian property is owned by an individual for at least the maximum period of ownership (for immovable property – 5 years or 3 years in cases defined by the Tax Code of the Russian Federation, for other property – 3 years), this income is exempt from taxation.
A resident is entitled to property tax deductions in respect of property, including immovable property, in the following amounts:
- RUB 1 million per tax period (calendar year) – for residential houses, flats, rooms, including privatised residential premises, garden houses or land plots (shares in the said property);
- RUB 250 thousand – for other immovable property;
- RUB 250 thousand – for other property (except for securities).
Instead of applying the property deduction, the taxpayer has the right to reduce the amount of income received from the sale of property by actually incurred and documented expenses directly related to the acquisition of this property.
The taxpayer has the right to independently determine whether it is more favourable to apply the property deduction or to confirm expenses directly related to the acquisition of this property.
Income from renting out property
Applicable tax rate 13% / 15%.
Taxation of income of tax non-residents of the Russian Federation
Non-residents pay tax only on income received from sources in Russia (income arising from Russian assets or received for employment performed in Russia, regardless of who is the actual source of payment).
A 30% rate is imposed on most income. Tax deductions are also not available for tax non-residents.
Income from employment
Applicable tax rate of 30%.
As of 1 January 2024, income from sources in the Russian Federation includes remuneration and other payments when a remote worker performs an employment function remotely under a contract with an employer that is a Russian organisation. Regardless of the tax status of the employee, the income will be subject to personal income tax at a progressive rate of 13% / 15% depending on the amount of income received.
Income from employment as a highly qualified specialist (HQS) and persons working on the basis of a patent will also be subject to personal income tax at the rate of 13% / 15%.
Bonuses from empolyment
The applicable tax rate is 30%.
For remote workers and HQSs – 13% / 15%.
Interest income
Total interest income on deposits received with Russian banks is not taxable to the extent of the amount calculated as follows:
1,000,000 * the maximum value of the CBR key rate in effect as of the 1st day of each month in the tax period. The excess amount is taxed at the rate of 13%/15%.
Dividend income
The tax rate is 15%.
Income from the sale of securities
Income from the sale of securities of both Russian and foreign organisations through a Russian broker is recognised as income received from a source in the Russian Federation and is subject to personal income tax at the non-resident rate of 30%.
At the same time, a non-resident individual may receive exemption from taxation of income from the sale of these shares if he or she has owned them for more than 5 years and provided that no more than 50% of the assets of the organisations consist of Russian immovable property, if the company is foreign – it must not be established in a country included in the ‘Black List’ of the Ministry of Finance of the Russian Federation.
A non-resident individual also has the right to reduce income from the sale of securities by the expenses incurred by him, with both the amounts from the sale and the acquisition costs calculated in roubles.
Income from the sale of shares in Russian organisations
The tax rate will be 30%.
At the same time, a non-resident may receive an exemption from taxation of income from the sale of shares in Russian companies if they have been held for 5 years or more.
Income from the sale of property, including immovable property
This income is subject to personal income tax at the non-resident rate of 30%.
If the Russian property is owned by the individual for at least the maximum period of ownership (for immovable property – 5 years or 3 years in cases defined by the Tax Code of the Russian Federation, for other property – 3 years), then this income is exempt from taxation.
A non-resident individual cannot apply a tax deduction and offset expenses for the acquisition of property, i.e. the full amount received from the sale is subject to personal income tax.
Income from renting out property
The applicable tax rate is 30%.
If it is planned to carry out such activities in the Russian Federation, we recommend considering the possibility of applying special taxation regimes – IE/self-employed.
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