Lawmakers Lower Income Tax Rate for High Earners in Second Reading of Tax Code Amendments

Members of the House of Representatives have adopted amendments to the Tax Code in the second reading.

According to the chamber’s press service, the rate of the increased tax on high incomes was revised during preparations for the second reading. As a result, the tax brackets and rates were approved as follows:

• 13% — for incomes up to 350,000 rubles
• 25% — for incomes above 350,000 rubles but not exceeding 600,000 rubles
• 30% — for incomes above 600,000 rubles

Initially, a 40% rate was proposed for income exceeding 600,000 rubles.

“For dividends, the income tax rate will be 13% for incomes up to 350,000 rubles and 25% for incomes above 350,000 rubles,” the press service added.

Earlier, it had been proposed that dividends be included in total income for determining the higher rates.

In addition, the following amendments were introduced before the second reading:

• The VAT exemption for bank operations involving financing under the assignment of monetary claims (factoring), previously proposed for cancellation, has been preserved. Other business entities will not have this exemption.
• A 10% VAT rate has been set for fresh apples produced (grown) in states with which customs control is established.
• The personal income tax exemption from Presidential Decree No. 493 “On the Development of Cashless Payments,” covering income paid by a bank to an individual in electronic money in the amount of 2% of a cashless payment for a good or service (the money-back incentive), has been transferred into the Tax Code.

The approved changes also provide for increased excise rates on fuel and tobacco products, along with an expanded list of excisable goods.

Rates of the land tax, real estate tax, environmental tax, gambling tax, transport tax, and the tax on rental of apartments will be indexed.

The amendments further introduce a higher real estate tax for large apartments and houses. Owners of certain motorcycle models will pay an increased transport tax. A minimum tax amount for professional income is also established.

Under the proposed changes, the tax burden in 2026 is projected at 25.7% of GDP.