Russia’s State Duma adopted a draft law at first reading on 29 October 2026, proposing changes to corporate income tax, personal income tax, VAT and other tax rules for 2027–2029.
Russia’s State Duma approved the package of amendments to the Russian Tax Code on 29 October 2026, as part of the draft Budget for 2027–2029. Draft Law No. 617-9 proposes changes to tax rates, deductions, compliance requirements and tax incentives, with several measures scheduled to take effect in 2027.
Corporate income tax
The draft law proposes a 35% corporate income tax rate on dividends transferred to special type C accounts and a 15% rate on specified passive income earned by closed-end and interval mutual investment funds intended for qualified investors.
Companies would be allowed to deduct expenses relating to defence against unmanned systems, including aerial, surface and underwater systems, and providing food to personnel in protective shelters. Uncompensated transfers of assets or funds to the Ministry of Defence, Armed Forces, National Guard, FSB and volunteer formations would also qualify for deductions.
Reduced corporate income tax treatment for IT companies would be extended to services providing access to digital books and electronic publications.
Personal income tax
Most individual income would be consolidated into a single aggregate taxable base subject to progressive tax rates ranging from 13% to 22%. This would include income from property and equity stake sales, dividends, bank deposit interest, securities and digital financial assets, as well as payments under insurance contracts, non-state pension schemes and long-term savings plans.
Banks would become tax agents responsible for calculating and withholding PIT on deposit interest. The calculation would be based on income received during the tax period, while the tax-free threshold would use the Bank of Russia’s key rate from the preceding tax period.
Taxpayers could apply unused standard, social and property-related tax deductions against deposit interest income. The preferential 15% PIT rate on dividends and deposit interest for non-residents would be replaced by the standard 30% rate. The special rate on passive income for personal funds would also increase from 15% to 22%.
Other proposals include PIT exemptions for employer financial assistance during maternity leave before childbirth and employer-funded medical care. A social tax deduction would be introduced for medical devices required during surgical procedures. Housing sale exemptions for families with children would cover individual house construction, while PIT on bookmaker and totalisator winnings would be calculated on net positive gains.
Value added tax
A 22% VAT rate would be introduced from 2027 on cross-border e-commerce involving goods imported into the Eurasian Economic Union (EAEU) from third countries by individuals. Digital platforms would act as tax agents.
The zero VAT rate for passenger air transport to and from airports in the Far East, Crimea and Sevastopol, alongside the 10% rate for flights through the Moscow air hub, would be extended until 1 January 2030.
Controlled foreign companies
The ownership threshold for determining a controlling person of a controlled foreign company (CFC) would increase from 25% to 50%, while the RUB 10 million tax-exempt profit threshold would be abolished.
Tax payment deferrals on CFC profits affected by sanctions would be extended until 2030. Penalties would also increase for late submission of notifications of participation, CFC notifications and CFC financial statements, as well as failure to provide requested documents confirming CFC profits or eligibility for a tax exemption.
Other tax measures
Companies applying for tax monitoring would need to meet only one of three criteria: revenue, asset value or taxes paid. Digital platforms would be required to monitor sellers’ tax compliance risks, with tax authorities able to order the suspension of product listings and order acceptance for non-compliant sellers.
The draft law also proposes higher excise taxes on alcohol, tobacco, fuel, motor oils and sugary drinks during 2027–2029. Nicotine-free liquids for electronic nicotine delivery systems would be added to the list of excisable goods.
Other measures include changes to Mineral Extraction Tax (MET) relief for natural gas producers investing in LNG regasification facilities in Kamchatka, adjustments to the Automated Simplified Tax System (AUSN) and Patent Tax System (PSN), and extensions of certain property tax benefits.
Draft Law No. 617-9 contains the proposed amendments to Part One and Part Two of the Russian Tax Code and related federal laws. The measures remain subject to further parliamentary consideration.
