The expert explained the impact of tax reform on foreign businesses and foreigners in Russia
Russian tax reform will affect foreign businesses and foreign citizens in the Russian Federation, first of all it will affect personal income tax and income tax, the general director of the consulting company told Sputnik “ Sinoruss» by Suran Radnaev.
On July 10, the State Duma of the Russian Federation adopted the law on tax reform and government amendments to it in the third reading.
The lawyer noted that the reform may primarily affect foreigners who pay personal income tax in Russia. According to her, the increase in the personal income tax rate will vary depending on the level of income.
«If a foreign citizen earns less than 2.4 million rubles a year in the Russian Federation, the personal income tax rate will not change and will remain at the same level of 13%,» said Radnaeva. According to her, for foreigners — tax residents in Russia with an income of 2.4-5 million rubles a year, the personal income tax rate will rise to 15%, with an income of 5-20 million rubles, the personal income tax rate will rise to 18%, with an income of 20 to 50 million — 20%, with an income of more than 50 million rubles — more than 22%.
The expert noted that the VAT rate will remain unchanged, but the profit tax rate will be increased — from 20% to 25%. Radnaeva noted that the increase in profit tax will also affect companies with foreign participation and may affect the level of investment in Russia by foreign businesses. At the same time, the expert pointed out that much will depend on the areas in which a foreign company invests in Russia.
«Foreign investors in manufacturing, IT and high technology will be affected to a lesser extent by the changes,» she said.
The expert emphasized that for foreign companies it will also be important to expand the income threshold for applying the simplified taxation system — 265.8 to 450 million rubles.
The changes will come into force on January 1, 2025. Finance Minister Anton Siluanov said that the change in tax rates will not affect 95% of small businesses.