Graduated personal income tax rate of 15%

LEGAL DIGEST \ 17.11.2020

The President of the Russian Federation signed a Law according to which the income of individuals exceeding 5,000,000 rubles will be subject to personal income tax at the rate of 15%.

According to the data of the document, from January 1, 2021, the amount of personal income tax will need to be calculated according to the following rules:

• if the amount of an individual’s income for the year is not more than 5,000,000 rubles, the tax is calculated at the rate of 13%;
• if the amount of income for the year exceeds 5,000,000 rubles, the tax is calculated at the rate of 15% of the excess amount plus 650,000 rubles.

The increased rate is applied to a total of taxation bases. For individuals who are tax residents of the Russian Federation, it includes income:

• from the main taxation base – salary;
• from equity participation, including in the form of dividends of a foreign organization that an individual recognized in the declaration;
• in the form of winnings in gambling and lotteries;
• from operations with securities and derivative financial instruments;
• from REPO operations, the subject of which are securities;
• from operations on securities loans;
• in the form of profit amounts of a controlled foreign company;
• received by participants of the investment partnership.

Personal income tax at the rate of 15% will also be applied to income of non-residents of the Russian Federation exceeding 5,000,000 rubles. The list of such income is specified in sub-clause 2.2 of clause 2 of article 210 of the Tax Code of the Russian Federation (as amended on January 1 of the following year).

Please note that in 2021-2022, the graduated personal income tax rate will be applied to each taxation base separately. Also, the calculation maintains the rate of 13% of income:

• from the sale of property (excluding securities);
• from property received by way of a gift;
• in the form of insurance payments under insurance contracts and pension payments.

For making mistakes when calculating and withholding tax at the increased rate in the first quarter of 2021, the organization, as a tax agent, is exempt from liability under article 123 of the Tax Code of the Russian Federation. To do this, it should independently transfer the missing amount of personal income tax to the budget of the Russian Federation before July 1 of the next year.

In the matters of applying the requirements of the Tax Code of the Russian Federation and calculating employees’ salaries, please contact Acsour specialists.