Progressive personal income tax and corporate tax at 25%, 2025
Federal Law No. 176-FZ of 12 July 2024 replaces Russia’s two-band personal income tax (13%, then 15% above 5 million roubles a year) with five bands from 1 January 2025: 13% up to 2.4 million roubles, then 15%, 18%, 20% and 22% above 50 million, each higher rate applying only to the part of income above its threshold. The same law raises the corporate profit tax rate from 20% to 25%, introduces a federal investment tax deduction, imposes VAT on businesses on the simplified tax system with income above 60 million roubles and turns the resort fee into a tourist tax. The Ministry of Finance, which drafted it after the President asked in February 2024 for a « fairer distribution of the tax burden », says the higher income-tax rates concern about 3% of the working population. Dividends, deposit interest and property sales keep a 13% / 15% scale, as do Far North wage supplements and pay linked to the « special military operation ». Figures from official Russian sources are cited as published.
Key points
Top income tax rate
22%
since 1 January 2025, income above 50 million roubles · Observed
Tax Code as amended by law 176-FZ; Federal Tax Service[6][7]
15% before 2025.
Corporate profit tax rate
25%
since 1 January 2025 · Observed
20% before 2025.
Income tax received at the higher rates, year-on-year change
40%
first quarter 2025 · Observed
Federal Tax Service, as published on the Ministry of Finance website[8]
38 billion roubles to the federal budget; the Service attributes the rise first to wage growth.
Mandatory levies
10.9% GDP
2024
At a glance
Reference text
Федеральный закон «О внесении изменений в части первую и вторую Налогового кодекса Российской Федерации, отдельные законодательные акты Российской Федерации и признании утратившими силу отдельных положений законодательных актов Российской Федерации» (Federal Law amending parts one and two of the Tax Code of the Russian Federation and certain legislative acts, and repealing certain provisions of legislative acts)[1]
No. 176-ФЗ · July 12, 2024
Read the text ↗Carried by
- Vladimir Putin (Владимир Путин)[2][1]President of the Russian Federation; in his Address to the Federal Assembly of 29 February 2024 he asked the Government and the State Duma for proposals on a fairer distribution of the tax burden, then signed Federal Law No. 176-FZ on 12 July 2024 · 2024 · Initiator
- Anton Siluanov (Антон Силуанов)[3][4]Minister of Finance; presented the tax proposals at the State Duma’s parliamentary hearings on 23 May 2024 and the draft Tax Code amendments at the Government meeting of 30 May 2024 · 2024 · Initiator
- Vyacheslav Volodin (Вячеслав Володин)[13][14](secondary source)Chairman of the State Duma; according to him, deputies amended the bill at second reading so that the higher rates do not apply to Far North wage supplements and raised the sports and health check-up deduction to 18,000 roubles · 2024 · Amendment
Implementation
- Federal Tax Service (ФНС России)
- Ministry of Finance of the Russian Federation (Минфин России), tax policy
- Employers and other tax agents, who withhold income tax at source
Stated objective
The reform is presented as a response to the President’s request for a fairer tax system that shifts the burden towards higher personal and corporate incomes and lowers it for families with children, while funding the national goals set in the 2024 Address. The ministry says the higher income-tax rates spare 97% of the working population; the 25% profit tax rate replaces turnover-based levies such as exchange-rate-linked export duties, is « in line with world practice » and is accompanied by investment incentives; the extra revenue is to go to social goals and national projects. The main tax parameters are meant to stay fixed until 2030.[2][4][5]
According to the President’s Address of 29 February 2024 and the Ministry of Finance
Share of the working population affected by the higher income-tax rates
3%
income above 2.4 million roubles a year · according to the Ministry of Finance (about 2 million people)[4][5]
Effective income-tax rate targeted for eligible low-income families with two or more children
6%
after a yearly partial refund · according to the Ministry of Finance[4][5]
Families whose average income per member is below 1.5 times the subsistence minimum; financed by the federal budget, according to the minister.
Main measures
- Five-band progressive scale for the main income tax base of residents (wages and other income of the main base, gambling and lottery winnings, controlled foreign company profits): 13% up to 2.4 million roubles a year, 15% from 2.4 to 5 million, 18% from 5 to 20 million, 20% from 20 to 50 million and 22% above 50 million. Each higher rate applies only to the part of income above its threshold: tax on the first 2.4 million is fixed at 312,000 roubles.[6][7]
- Two-band scale kept for other incomes: 13% up to 2.4 million roubles and 15% above for property sales, dividends and deposit interest; 13% up to 5 million and 15% above for Far North regional coefficients and supplements and for pay linked to the « special military operation ». Incomes under different rules are not added together.[8][6][7]
- Higher standard deductions for children: 2,800 roubles a month for the second child and 6,000 for the third and each further child; 12,000 for each disabled child; a deduction of 18,000 roubles for passing the GTO sports standards and the annual health check-up.[5]
- Corporate profit tax rate raised from 20% to 25%, with a new federal investment tax deduction (parameters set by the Government), the regional investment deduction extended indefinitely, a 5% rate for IT companies until 2030 and all existing preferential regimes kept.[5][9]
- Simplified tax system for small business: thresholds raised to 450 million roubles of income and 200 million of fixed assets; businesses with income above 60 million roubles become liable to VAT, at their choice either at the general rates with deductions or at 5% or 7% without deductions.[5]
- Higher mineral extraction tax for fertiliser producers, iron ore, coal, gold and diamond mining, where the ministry says operating profitability is twice or more the economy-wide average.[5]
- The resort fee becomes a local tourist tax: 1% of the accommodation price in 2025, rising by one point a year to a 5% ceiling in 2029 (at least 100 roubles a night); regions and municipalities may raise property tax rates on assets worth over 300 million roubles (up to 2.5%, land up to 1.5%).[5]
In data
2024 and 2025
| Annual income (roubles) | Until 2024 | From 2025 |
|---|---|---|
| Up to 2.4 million | 13% | 13% |
| 2.4 to 5 million | 13% | 15% |
| 5 to 20 million | 15% | 18% |
| 20 to 50 million | 15% | 20% |
| Above 50 million | 15% | 22% |
Scale starts at 0% · Marginal rates: each rate applies only to the part of income within the band. Before 2025 the scale had two bands, 13% up to 5 million roubles and 15% above (the rule that Far North supplements and « special military operation » pay keep). Dividends, deposit interest and property sales follow a separate 13% / 15% scale. Official Russian sources, cited as published.
2024 and 2025
| Rate | Until 2024 | From 2025 |
|---|---|---|
| Standard rate | 20% | 25% |
Scale starts at 0% · IT companies get a 5% rate until 2030, according to the Ministry of Finance.
Mandatory levies
10.9% GDP
2024
Budget balance
-3.9% GDP
2025
Gini index
33index
2023
Household-survey measure compiled by the World Bank; published with a lag.
Income share of the richest 10%
25.1%
2023
Timeline
In his Address to the Federal Assembly, the President asks for a fairer distribution of the tax burden[2]
He proposes shifting the tax burden towards those with higher personal and corporate incomes, lowering it for families, closing loopholes, and then fixing the main tax parameters until 2030.
Parliamentary hearings in the State Duma on the tax system[3]
The Minister of Finance says the Government hears deputies’ requests for more progression in the income tax and is ready to discuss replacing exchange-rate-linked export duties with a higher profit tax rate; he says the Government supports not raising VAT.
- Announced
The Minister of Finance presents the draft Tax Code amendments to the Government, with a five-band income tax and a 25% profit tax[4]
The Russian Union of Industrialists and Entrepreneurs asks to drop the sector-specific tax increases[12](secondary source)
At the expert council of the Duma budget committee, its president Alexander Shokhin says the business body accepted the principle of taxing profitability, but opposes the higher mineral extraction tax and the gas excise for certain sectors.
Second reading: Far North supplements exempted from the higher rates[13](secondary source)
According to the Duma chairman, the amendment exempting wage supplements in the Far North and similar areas follows a decision of the President; the deduction for passing GTO sports standards and health check-ups is raised from the 6,000 roubles of the first reading to 18,000 roubles.
Business accepts a smaller envelope for the federal investment tax deduction[15](secondary source)
The deduction, introduced to offset the profit tax increase for companies that invest, cannot exceed 50% of the cost of the asset. The Russian Union of Industrialists and Entrepreneurs, which had estimated its request at about 500 billion roubles, says it agreed to 200 billion roubles for 2025.
First quarter 2025: income tax at the higher rates up 40%[8]
According to the Federal Tax Service, receipts at the higher rates, which go to the federal budget, reached 38 billion roubles in January-March 2025, 11 billion more than a year earlier; total income tax receipts rose by 13%, which the Service attributes first to wage growth and then to the wider scale.
The Ministry of Finance reports bonuses brought forward to December 2024 and no shift into the shadow[9]
Deputy minister Alexei Sazanov says companies paid many bonuses to senior managers at the end of 2024, under the old scale, which distorts the 2025 income tax base above 5 million roubles; he says the ministry does not observe a move into the shadow, and that profit tax receipts of the federal budget were up 75% year on year as of May.
The debate
Citoyen takes no position: arguments are reported as their authors put them.
According to its supporters
- The Ministry of Finance says the progressive scale answers a long-standing demand for fairness, spares about 97% of the working population and is paired with lower taxes for families with children through higher deductions and a partial refund bringing their effective rate to 6%.[3][4]
- On the profit tax, the minister argues that taxing the financial result is better than turnover-based levies such as exchange-rate-linked export duties, that Russia’s 20% rate was one of the lowest among developed and emerging economies and that 25% is in line with world practice, with investment incentives kept and extended.[3][4]
- Duma chairman Vyacheslav Volodin says the extra revenue from the progressive scale will support families with children, participants in the « special military operation », pensioners and the regions, and fund the new national projects.[11][13](secondary source)
- In August 2025 the Ministry of Finance said it observed no shift of incomes into the shadow and explained that dividends stay at 15% because the higher profit tax already reduces them, which it says amounts to an effective rise of about 20% in their total taxation.[9]
According to its opponents
- The Russian Union of Industrialists and Entrepreneurs opposed the sector-specific increases (mineral extraction tax, gas excise), which it said would cut the investment potential of the five sectors concerned by more than 3%, equivalent to 1 trillion roubles of investment by 2030, and risk halting new projects.[12](secondary source)
- Business had asked for the federal investment deduction to cover any investment in priority activities, an envelope it put at about 500 billion roubles; it obtained 200 billion for 2025, a pilot year in its view.[15](secondary source)
- Economists interviewed by Novaya Gazeta Europe said the higher profit tax takes investment resources from business, and that the 2.4 million rouble threshold, set in nominal terms, mainly hits the middle class; by the outlet’s own calculation, the number of large-company employees earning above it doubled between 2021 and 2023.[16][17](secondary source)
- A risk of incomes moving into the shadow was raised during the debate, notably by the head of the Russian Union of Industrialists and Entrepreneurs, and companies brought senior managers’ bonuses forward to December 2024 to avoid the new rates, according to the Ministry of Finance itself.[9]
Indicators to watch
- Tax revenue, % of GDP · Banque mondialeSee the card →
- Budget balance, % of GDP · Banque mondialeSee the card →
- Gini index · Banque mondialeSee the card →
- Income share of the richest 10% · Banque mondialeSee the card →
- Income tax receipts at the higher rates (federal budget) · ФНС / Минфинno Citoyen card yet
- Corporate profit tax receipts · ФНС / Минфинno Citoyen card yet
Sources
- [1]Федеральный закон от 12.07.2024 № 176-ФЗ «О внесении изменений в части первую и вторую Налогового кодекса Российской Федерации, отдельные законодательные акты Российской Федерации и признании утратившими силу отдельных положений законодательных актов Российской Федерации» –Официальный интернет-портал правовой информации (publication.pravo.gov.ru), July 12, 2024
- [2]Послание Президента Федеральному Собранию –Президент России (kremlin.ru), February 29, 2024
- [3]Выступление Министра финансов Антона Силуанова на парламентских слушаниях в Госдуме –Министерство финансов Российской Федерации, May 23, 2024
- [4]Выступление Министра финансов Антона Силуанова на заседании Правительства РФ –Министерство финансов Российской Федерации, May 30, 2024
- [5]Закон о совершенствовании налоговой системы принят Госдумой и одобрен Советом Федерации –Министерство финансов Российской Федерации, July 10, 2024
- [6]Как с 2025 года применять новые ставки по НДФЛ и прогрессивную шкалу –Федеральная налоговая служба (ФНС России), January 23, 2025
- [7]НДФЛ в 2025 году: как будет применяться прогрессивная шкала налогообложения –Федеральная налоговая служба (ФНС России), February 5, 2025
- [8]ФНС: поступления НДФЛ по повышенным ставкам в бюджет за I квартал выросли на 40% –Министерство финансов Российской Федерации (по материалам агентства «Прайм»), May 22, 2025
- [9]Алексей Сазанов: «Ухода в тень из-за введения новой шкалы НДФЛ мы не фиксируем» –Министерство финансов Российской Федерации (интервью журналу «Эксперт»), August 13, 2025
- [10]В Думе предложили перенести II чтение налоговых поправок с 4 на 9 июля –Интерфакс, July 1, 2024 · secondary source
- [11]Законопроект о налоговой реформе прошел первое чтение в Госдуме –Право.ru, June 20, 2024 · secondary source
- [12]Шохин заявил, что рост НДПИ и введение акциза на газ чреваты снижением инвестиций и остановкой проектов –Интерфакс, June 24, 2024 · secondary source
- [13]Госдума приняла во втором чтении поправки в налоговую систему –Российская газета, July 9, 2024 · secondary source
- [14]Госдума приняла закон о прогрессивной шкале НДФЛ –Парламентская газета, July 10, 2024 · secondary source
- [15]РСПП ждет, что власти учтут предложения бизнеса по ФИНВ –Интерфакс, September 19, 2024 · secondary source
- [16]«Это уже какое-то экономическое самоубийство» –Новая газета Европа, May 29, 2024 · secondary source
- [17]Ползучая справедливость –Новая газета Европа, May 30, 2024 · secondary source