The Russian Ministry of Finance has proposed Tax Code amendments to help SMEs adapt to 2026 tax changes. Measures include VAT relief for catering, transitional rules for STS and PTS, flexible tax choices, and simplified insurance contributions.
The Russian Ministry of Finance (MoF) has submitted amendments to the Tax Code aimed at helping small and medium-sized enterprises (SMEs) adapt to the tax changes that took effect in 2026.
The Tax Code is proposed to be supplemented with the following provisions:
VAT exemption for catering services
From April 1 to 31 December 2026, organisations and individual entrepreneurs in the catering sector operating under the simplified taxation system (STS) or the patent taxation system (PTS), who became VAT payers in 2026, will be exempt from VAT. This exemption will apply without the requirement that the average wage level for the previous year matches the regional average.
Transitional Period for Small and Medium Businesses
- Entrepreneurs who lost the right to apply for PTS in 2026 will be allowed to claim VAT deductions on goods, works, services, and property rights not utilised under PTS.
- Businesses under STS that became VAT payers in 2026 will be permitted to reduce STS income by the amount of VAT paid on advance payments received before they became VAT payers.
- When calculating 2025 income to determine whether VAT exemption is lost, it is proposed not to include income from interest on deposits and balances in Russian bank accounts for entrepreneurs with 2025 income not exceeding BYN 60 million, who lost VAT exemption under STS in 2026. The same right will be granted to individual entrepreneurs who lost the right to apply for PTS in 2026.
Choice of taxation system
- If, based on 2025 results, an entrepreneur combining PTS with the general taxation system earned more than BYN 20 million, they will be entitled to switch to STS starting 1 January 2026, by notifying the tax authorities no later than 25 April 2026.
- Individual entrepreneurs combining PTS with STS will be able to change the taxable object under STS for the 2026 tax period by 25 April.
This will give businesses more time to select the most suitable taxation system. The changes are designed to allow for a balanced choice of tax regime and a smoother transition to the new rules.
Simplification of reduced Insurance contribution rules
It is proposed to remove the requirement that at least 70% of income from the previous year must come from the main type of activity for SMEs in the manufacturing sector to apply reduced insurance contribution rates.
SMEs will also be allowed to combine income from both primary and additional types of activities listed by the Government of the Russian Federation when calculating the required share of income for applying the benefit.
This announcement was made on 2 March 2026.
