Russia’s State Duma is considering draft law No. 1331250-8 to cut the standard VAT rate from 22% to 20%, raise the VAT threshold for businesses using the simplified tax regime to RUB 60 million and restore a unified 15% insurance premium rate for SMEs from 1 January 2027.
Russia’s State Duma has received draft law No. 1331250-8, submitted on 2 September 2026, proposing to reduce the standard VAT rate from 22% to 20% and raise the VAT threshold for businesses using the simplified tax regime from RUB 20 million to RUB 60 million.
The proposed VAT reduction is intended to lower the tax burden on supply chains, manufacturing, trade and services and limit the extent to which businesses pass higher costs on to consumers through final prices. The existing reduced VAT rates of 0% and 10% would remain unchanged.
Under the draft, companies using the simplified tax regime would be required to calculate and pay VAT only after exceeding RUB 60 million in revenue. The proposal would replace the current threshold schedule, which provides for lower limits in later years.
The bill also proposes restoring a unified reduced 15% insurance premium rate for all SMEs on employee payouts exceeding 1.5 times the minimum wage (MROT), removing restrictions based on economic activity.
The explanatory note cites higher financing costs, weaker consumer demand, rising operating expenses and increased tax and employment costs as pressures on SMEs in 2026. It points to Moscow’s flexible office market, where vacancy reached 16% in May 2026, and demand fell by more than 50% year-on-year while rental rates increased by 42%.
If adopted, the measures would take effect from 1 January 2027. The draft states that implementation would require additional allocations from the federal budget system to offset lost tax revenues.
