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Amendments to the RF Tax Code: Law Published

This year will undoubtedly go down in history as a year of the tax system restructuring.

We previously discussed two laws passed this summer that significantly changed the Russian tax legislation. Some of the amendments are already in effect, and some will enter into force on or after 1 January next year [1].

Today, we will discuss Federal Law No. 362-FZ of 29 October 2024 [2], which also amended the tax legislation, specifically by adjusting some of the summer amendments. These amendments affect personal income tax, corporate income tax, the simplified tax system, excise taxes, and a number of other issues.

Let's take a look at the provisions of this law that will be of most interest to a wide range of taxpayers.

Change to the procedure for calculating penalties

1. The procedure for calculating penalties in the period from 1 January 1 to 31 December 2025 has been changed. During this period, penalties will be charged as follows:

    1. during the first 30 calendar days (inclusive) of the delay in the fulfilment of an obligation to pay taxes — 1/300 of the Bank of Russia's key rate in effect during the specified period;
    2. from the 31st day of the delay to the 90th day (inclusive) — 1/150 of the Bank of Russia's key rate in effect during the specified period;
    3. from the 91st day of the delay — 1/300 of the Bank of Russia's key rate in effect during the specified period.

According to the standard procedure for legal entities, the penalty rate for delays of up to 30 calendar days (inclusive) is 1/300 of the Bank of Russia's key rate, and thereafter, until the debt is fully repaid, it is 1/150 of the Bank of Russia's key rate (Paragraph 4, Article 75 of the RF Tax Code).

However, recently the penalty payment procedure underwent frequent changes. Thus, from 9 March 2022 to 31 December 2024, the penalty rate for legal entities is set at 1/300 of the Bank of Russia's key rate in effect during that period (Paragraph 5, Article 75 of the RF Tax Code).

As we can see, a special, lower penalty calculation procedure will also be in effect next year (higher penalties will be charged from the 31st to the 90th day of delay).

2. Penalties will not be charged on the arrears in the amount not exceeding the positive balance of the taxpayer's single tax account increased by the amount of funds credited as fulfilment of the taxpayer's upcoming obligation to pay a specific tax (Paragraph 3, Article 75 of the RF Tax Code).

Amendments to Corporate Income Tax

  1. Taxpayers will be able to depreciate property for which the federal investment tax deduction has been applied [3]. According to the summer amendments to the RF Tax Code, depreciation of such property was prohibited. This agitated taxpayers, who pointed out that under such conditions, the application of an investment deduction becomes economically impractical. As we can see, legislators, financial authorities and taxpayers have managed to reach an agreement on this issue — depreciation of such fixed assets has become possible. .
  2. At the same time, it has been established [4], that the federal investment tax deduction will not apply to fixed and intangible assets, if expenses to which the increasing coefficient was applied were used to determine their initial cost. For example, when determining the initial cost of intangible assets in the form of exclusive rights to computer programs and databases included in the unified register of Russian computer programs and databases [5], the taxpayer has the right to account for these expenses using a coefficient of 2 starting from 1 January 2025 (Paragraph 3, Article 257 of the Russian Tax Code).
  3. The tax rate on interest income on government and municipal securities, as well as on bonds of Russian organisations traded on the organised securities market was increased by 5%, i.e., to 20%.
  4. An increasing coefficient of 2 is stipulated for expenses related to the acquisition (under a license or sublicense agreement with the copyright holder) of rights to use software and hardware systems included in the unified register of Russian computer programs and databases (Subparagraph 26, Paragraph 1, Article 264 of the Russian Tax Code). The possibility to account for expenses with an increasing coefficient appeared in July [6], but now the list of expenses to which an increasing coefficient can be applied has been expanded.

Simplified taxation system and VAT

  1. According to the summer amendments, taxpayers using the simplified taxation system (STS) will become VAT payers starting from the new year, i.e. they will be required to issue invoices and maintain VAT records. However, so far, the RF Tax Code remained silent on whether simplified taxpayers, who are automatically exempt from VAT because their income does not exceed RUB 60 million, would be required to issue invoices. This issue has now been resolved: according to the amendments to the RF Tax Code, taxpayers using the STS should not issue invoices, if their total income for the calendar year preceding the calendar year from which such a taxpayer switched to the STS did not exceed RUB 60 million (Paragraph 5, Article 168 of the RF Tax Code).
  2. As part of the fight against tax optimisation schemes involving the transfer of business to regions of the Russian Federation where the tax rate is lower, the following condition has been added to Paragraph 2, Article 346.21 of the RF Tax Code: now, a taxpayer using the simplified tax system (STS) will be required to pay taxes at the previous rate for three years after transition. Relocation of legal entities under the STS to other regions with the sole purpose of saving on a lower rate has lost its relevance.
  3. Effective 1 January 2025, a new local tax - a tourist tax (Chapter 33.1 of the RF Tax Code) - will be introduced, replacing the resort fee [7]. The tax rate will gradually increase (no more than 1% in 2025, then plus 1% per year, and no more than 5% of the cost of accommodation in 2029). The tax is payable to the budget at the location of the accommodation facility. According to recent legislative changes, the tourist tax cannot be treated as expenses when applying the simplified tax system "income minus expenses," as this can be done when paying corporate income tax (Subparagraph 22, Paragraph 1, Article 346.16 of the RF Tax Code).
  4. The deflator coefficient for 2025 is set at 1. The previously established deflator coefficients required for the purposes of Chapter 26.2 of the RF Tax Code will not be applied [8].

Personal Income Tax

  1. Among the amendments to Chapter 23 of the RF Tax Code that will be of interest to a wide range of readers, we note the provision that has already entered into force, according to which the taxpayer’s income in the form of material benefit from savings on interest for use of borrowed (credit) funds under a loan (credit) agreement concluded on or before 31 December 2024, is exempt from personal income tax if two conditions are simultaneously met:
    1. the taxpayer has a right, confirmed by the tax authority, to receive a property tax deduction established by Subparagraph 3, Paragraph 1, Article 220 of the RF Tax Code;
    2. the taxpayer received a material benefit from savings on interest for the use of borrowed (credit) funds provided:
      • for new construction or acquisition in the Russian Federation of a residential building, apartment, room, or a share (shares) therein, land plots provided for individual housing construction, land plots where the acquired residential buildings are located, or a share(shares) therein; or
      • by banks located in the Russian Federation, for the purpose of refinancing (relending) loans (credits) received for new construction or acquisition in the Russian Federation of a residential building, apartment, room, or a share (shares) therein, land plots provided for individual housing construction, or land plots where the acquired residential buildings, or a share (shares) therein, are located.

Such income continues to be recognised, if the borrower and lender meet certain criteria (either related parties, or employer and employee, etc.).

  1. Effective 1 January 2025, income from securities transactions shall include (in addition to income from the sale or redemption of securities) income from fiduciary management of assets constituting a unit investment fund received during the tax period (Paragraph 7, Article 214.1 of the RF Tax Code), which will be subject to personal income tax at a rate of 13-15% (Paragraph 6, Article 210, Subparagraph 1.1, Article 224 of the RF Tax Code as amended by Federal Law No. 362-FZ dated 29 October 2024).

[1] Amendments to the RF Tax Code: corporate income tax — Unicon, Amendments to the RF Tax Code: controlled foreign companies — Unicon, Amendments to the RF Tax Code: personal income tax — Unicon, Amendments to the RF Tax Code: general issues — Unicon

[2] Federal Law No. 362-FZ of 29 October 2024 "On Amendments to Parts One and Two of the RF Tax Code and Certain Legislative Acts of the Russian Federation"

[3]  The new wording of Paragraph 54, Article 2 of Federal Law No. 176-FZ dated 12 July 2024, which supplemented the RF Tax Code with Article 286.2 "Federal Investment Deduction", excludes the prohibition on depreciation of the relevant property

[4] The new wording of Paragraph 54a, Article 2 of Federal Law No. 176-FZ dated 12 July 2024, which supplemented the RF Tax Code with Article 286.2 "Federal Investment Deduction", introduces a corresponding provision

[5] reestr.digital.gov.ru

[6] Federal Law of 12 July 2024 No. 176-FZ "On Amendments to Parts One and Two of the RF Tax Code, Certain Legislative Acts of the Russian Federation, and Recognition of Certain Provisions of Legislative Acts of the Russian Federation as Invalid”

[7] Federal Law of 12 July 2024 No. 176-FZ "On Amendments to Parts One and Two of the RF Tax Code, Certain Legislative Acts of the Russian Federation, and Recognition of Certain Provisions of Legislative Acts of the Russian Federation as Invalid”

[8] Subparagraph "d", Paragraph 2, Article 8 of Federal Law No. 362-FZ of 29 October 2024 amends Article 8 of Federal Law No. 176-FZ dated 12 July 2024 by adding the corresponding provision thereto

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Vitaly Ivanenko

Vitaly Ivanenko

Partner, Tax Advisory