Russia is set to introduce a new one-time tax on banks’ excess profits following a surge in financial sector earnings. The bill (No. 728613-8) is to be presented to the State Duma on 1 October 2024 by Budget Committee deputy chairman Aleksandr Remezkov and A Just Russia leader Sergei Mironov.
The method for calculating excess profits in the banking sector, as outlined in the proposed bill, is similar to the approach used under Federal Law No. 414-FZ of 4 August 2023, “On Excess Profit Tax”.
Excess profit for banks will be calculated as the difference between the average profit for 2023 and 2024 and the average profit for 2021 and 2022. The tax rate is set at 10%, with no discounts available for early payment.
The Central Bank reported that Russian banks’ total net profit reached RUB 3.3 trillion by the end of 2023, marking a more than 16-fold increase compared to 2022. The Bank of Russia projects that in 2024, net profits will range from RUB 3.1 to RUB 3.6 trillion.
