Income tax increased for high-earning Russian citizens

Income tax increased for high-earning Russian citizens

Russian President Vladimir Putin signed a law raising the personal income tax rate from 13% to 15% for incomes exceeding 5 million rubles ($65,866) per year. The document was published on the official portal of legal information on Monday.

The law was drafted by the order of the President to create an additional source of funding for the treatment of children with severe life-threatening and chronic diseases, including rare ones.

According to the financial and economic feasibility study, the increase in the tax rate will lead to additional tax receipts in the amount of 60 bln rubles ($790 mln) in 2021, 64 bln rubles ($843 mln) in 2022, and 68.5 bln rubles ($902 mln) in 2023. These allocations have already been reserved for the formation of the draft federal budget for 2021 and the planning period of 2022 and 2023 under the Healthcare Development state program.

The new law stipulates that the personal income tax rate remains at 13% for incomes of individuals (Russian tax residents), which are raised from sale of property and their shares in it, incomes in the form of the cost of property obtained by way of gift, as well as for taxable incomes individuals receive in the form of insurance payments under insurance agreements and in the form of pensions payments.

The exception is made for securities. The bill emphasizes that a fixed income over 5 mln rubles a year, raised by a foreign company is subject to a 15% income tax. This also applies to dividends an individual receives from a foreign entity and declares in his or her tax return.

As for control over the raised personal income tax rate payment, the bill envisages that tax agents will be exempt from liability for tax violations for the first quarter of 2021. They are also exempt from paying the corresponding amounts of penalties in case they voluntarily transfer specified tax amounts to the budget system of the Russian Federation until July 1, 2021.

2920 views


Vestnik Kavkaza

on YouTube

Subscribe



Populars