New Incentives: How Presidential Orders Will Change Russia's Tax Industry
The tax industry in Russia may undergo changes. Following the VTB forum "Russia Calling!", Russian President Vladimir Putin gave the government several instructions concerning this area. The Cabinet of Ministers will have to define the parameters for the use of the family savings instrument and the provision of a tax deduction for life insurance contracts. Changes will also take place in the order of tax registration of non-residents. How the innovations will work - in the material "Izvestia".
Important changes
Russian President Vladimir Putin gave the government several instructions concerning the tax sphere. They are formulated following the forum "Russia Calling!". The full list is published on the Kremlin website.
One of the instructions, in particular, envisages the creation of a "family savings instrument". The Cabinet of Ministers together with the Central Bank of the Russian Federation will have to determine the parameters of its use. The new instrument will provide for a personal income tax deduction for funds invested in savings. It will be possible to receive up to 1 million rubles per year.
This is not the only instruction related to the tax deduction. The government will also have to formulate the parameters for granting deductions for amounts paid under life insurance contracts within the limits of the tax deduction for long-term savings contracts.
Another change will be related to the simplification of registration in the tax authorities of persons who are not tax residents of the Russian Federation. The new procedure will involve registration on the basis of documents required to open a bank account with credit organizations.
Russian Prime Minister Mikhail Mishustin and the head of the Bank of Russia Elvira Nabiullina have been appointed responsible for the instructions. The deadline is July 15, 2025.
Izvestia editorial board sent an inquiry to the Central Bank of the Russian Federation. At the time of publication, no reply had been received.
Family capital
In recent months, the number of Internet inquiries from the population on deposits has increased, which indicates the growing interest of citizens in effective savings, points out tax consultant, founder of the consulting company "Titul" Tatiana Knyzhova.
Today, Russia already has a long-term savings program in place, which includes contributions under non-state pension fund contracts, cash in individual investment accounts and pension contributions under non-state pension provision contracts, the expert lists.
Since 2025, equity life insurance has been added to the number of instruments. However, it has not yet begun full-fledged work - the policies DSL tentatively will be sold in the spring.
The new savings instrument to be developed by the government should ensure the financial stability of Russian families. And it is likely to be based on the existing mechanisms, suggests Alexei Rodin, financial advisor and founder of Rodin.Capital.
- These instruments allow Russians to invest on the stock market with special tax benefits on their own or through financial intermediaries," he points out.
The need to create a family instrument was discussed as early as last October, Rodin recalls. At that time, Deputy Finance Minister Ivan Chebeskov said that the Russian Finance Ministry was discussing the creation of such a program.
The emergence of such a mechanism will allow citizens to more effectively plan and accumulate capital for different purposes, such as education of children or buying housing, says financial advisor, founder of Vedeneeva Consulting Group Anna Vedeneeva.
- It is possible that the instrument will provide for various investment options, including the possibility of choosing between financial products, this will allow to take into account the individual needs of depositors, - added the interlocutor. Plus at the initial stage additional measures of state support, such as subsidies or guarantees, may be provided, which will increase citizens' confidence in the program.
The main difference between existing savings instruments and future ones is the amount of tax deduction that can be utilized. In the existing capital creation programs, the tax deduction is provided for the amount of regular investments up to 400 thousand rubles, Rodin specifies. For the new family instrument, the limit will be increased to Br1 million.
- All working family members will be able to register a deduction under one program. Otherwise, the parameters of the new mechanism are unknown. It is expected that they will be announced as they are developed, - believes the expert.
Profitable insurance
Equity life insurance (ELI), which appears in the presidential instruction, is a new instrument that will appear in 2025: a person invests one part of the insurance premiums in investment funds, and the second part is directed to his own insurance in case of serious illness or death, explains Tatiana Knizhova.
- If an insured event occurs, the policyholder or his beneficiary receives an insurance payment in addition to the one placed in the investment part. If the insured event does not occur, the product owner takes back the accumulated investment part at the end of the contract," says the expert.
The objective of the DCF is to contribute to the development of voluntary life insurance, which is not very popular in Russia. It is also important that this instrument makes it possible to attract "long" money into the economy.
Granting a tax deduction for the amounts spent on HML contracts will be similar to the procedure for granting deductions for individual investment accounts, Knizhova believes. To qualify for the deduction, it will most likely be impossible to terminate an insurance contract within a certain period of time and to have other insurance contracts.
From 2025, tax deductions to accumulated funds can be granted not only when filing a 3-NDFL tax return, but also in a simplified (proactive) procedure, the tax consultant reminds.
- Getting a deduction every year is getting easier. It is enough to enter the taxpayer's personal cabinet on the website of the Federal Tax Service, check and sign the pre-filled application for a deduction. The application is formed in the personal cabinet until March 20, - says Tatiana Knyzhova.
In this case, the tax authority already has all the information for granting a tax deduction: data on the amount of long-term savings received from banks and NPF, and the amount of personal income tax paid for the citizen by the tax agent. It will not be necessary to provide supporting documents and fill out a declaration.
However, the expansion of the program requires careful elaboration within the framework of savings policy for the population, notes Ravil Akhmadeev, Associate Professor of the Department of State and Municipal Finance of Plekhanov Russian Economic University. It is necessary to take into account the possibility of applying the deduction, for example, in the event of various types of insurance events, the expert is convinced.
In general, the new scheme will be beneficial primarily to those who are officially employed and receive a white salary, says Alexander Romanov, a certified insurance expert. In this case, a portion of the personal income tax will be refunded to the taxpayer.
Search for new persons
Tatyana Knyzhova is certain that the simplification of the registration procedure ordered by the President is connected with the personnel shortage observed in Russia. Businesses today cannot wait for the labor market to fill up with qualified personnel with adequate salary expectations and are trying to hire foreign labor.
The flow of labor migrants from CIS countries has decreased many times since the beginning of the pandemic, the tax consultant specifies. However, there are non-CIS countries with high unemployment, from which it is possible to attract employees in the future.
- I am sure that the simplified procedure for registration of non-residents will remove the issue of complexity of registration of foreigners in our country. Perhaps, the labor market will be replenished with personnel from China, Serbia, Vietnam, Bangladesh and India, - says the interlocutor of "Izvestia".
At the moment, in order to be registered for tax purposes in Russia, a foreign citizen needs to submit to a tax inspectorate or MFC an application in the established form 2-2-Uccount, attaching his passport (and, if necessary, its notarized translation) and a document confirming the right to reside or stay in the Russian Federation, Knizhova reminds. Electronic submission of documents will require a digitally qualified signature.
- The new procedure may provide for the abolition of the 2-2-account application and shortening the period of assignment of TIN. The package of documents itself is not difficult to prepare, and the list of documents in any case contains both a passport and a document confirming the right of residence or stay of a foreigner in Russia, - says the expert.
Such an approach will unload the tax authorities and MFC, Knizhova believes. It will also be beneficial for business - the future employee will be able to submit documents for registration with the tax authority independently, which will significantly speed up the process, which is delayed for the employer for up to 15 days.
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