State Duma approved a tax policy bill introducing new benefits for businesses and citizens, simplified tax rules, and sector-specific incentives.
Russia’s State Duma approved in its second reading of a bill outlining major directions of the country’s tax policy, incorporating proposals from businesses and government agencies, and implementing directives from the President and Government on 18 November 2025.
The amendments introduce new benefits for citizens and businesses. Parents paying for children’s sports activities would be eligible for a social tax deduction, while participants in the “Zemsky Coach” programme would receive a one-time compensatory payment exempt from personal income tax. Individuals in areas under emergency regimes, including states of emergency and counter-terrorism operations, would be exempt from land and property taxes.
The bill also clarifies the taxation of interest income from bank deposits, which would be subject only to personal income tax and excluded from the taxable base for individual entrepreneurs under special regimes such as the Unified Agricultural Tax (UAT), Simplified Tax System (STS), and Alternative STS (A-STS). Certain social payments linked to work in the Far North, such as vacation pay, sick pay, and travel allowances, would be taxed separately at a rate not exceeding 15%.
To ease the application of special tax regimes, the revenue threshold for VAT under simplified and patent systems would gradually decrease: RUB 20 million in 2026, RUB 15 million in 2027, and RUB 10 million from 2028. Small businesses registering for VAT for the first time could opt out of the reduced VAT rate once during their first year, and STS taxpayers would not be penalised for failing to submit their first VAT declaration under new rules.
For businesses, the bill maintains VAT exemptions on sales of Russian software and allows radio-electronics companies applying reduced insurance contributions to include revenue from design and development services. Regions would be able to establish investment tax deductions at their discretion. Excise measures include raising the reverse excise coefficient to 85% in 2026 for refineries unable to modernise under investment agreements, and setting excise on denatured ethyl alcohol to zero if used for high-octane gasoline production.
Following public consultation, the taxation of betting offices would shift from a 5% turnover tax to 7% on the difference between bets received and winnings paid. The bill also extends special rules for calculating late payment penalties and accelerates VAT refunds.
Internationally, the draft law proposes measures to mitigate the impact of suspended agreements on the avoidance of double taxation, providing additional support for Russian businesses operating abroad.
