Russians have been charged a tax on deposits. What you need to know

Russian citizens have massively received notifications from the Federal Tax Service on the payment of tax on income from bank deposits for 2024. How much does it amount to, who should pay, and what other taxes are available on investments, Izvestia reports.

What is the deposit tax?

• This is a relatively new contribution, which is officially called the "personal income tax on income in the form of interest earned on deposits (account balances) in banks located in the territory of the Russian Federation." It belongs to the category of personal income taxes (personal income tax).

• The tax is levied on the interest income that the depositor received from all his deposits (including foreign currency) in all banks during the reporting year. The collection takes place at the personal income tax rate, that is, 13% for most citizens or 15% for those whose annual income exceeds 5 million rubles. On January 1, 2025, a new progressive scale was introduced with a maximum rate of 22%. According to it, personal income tax charges, including deposit tax, will begin to arrive in 2026.

• Information about the depositor's income is received by the Federal Tax Service (FTS) from banks, after which the total amount to be paid is calculated. The notification of the tax, if it is credited, is sent to the taxpayer's personal account.

Who pays the deposit tax

• Most depositors will not have to pay tax on deposit income. There is a tax-free base from which no tax is levied. Its size depends on the maximum value of the key rate of the Bank of Russia, which could be during the year (data for the 1st day of each month is taken into account). This percentage is multiplied by 1 million rubles, and this results in a tax-free balance.

• In 2024, the Central Bank's rate reached 21% (this decision was made on October 25). This means that during this period the non-taxable income from deposits amounts to 210 thousand rubles. The tax will be levied only on income that exceeds this figure. For example, if a person has earned 250 thousand rubles on deposits, then only the amount of 40 thousand rubles will be taxed at the personal income tax rate.

• Deposits with a rate below 1% throughout the year, inherited deposits and escrow accounts are not subject to taxation. Income on foreign currency accounts is converted into rubles at the official exchange rate of the Central Bank on the date of the actual interest payment.

When and why was the deposit tax introduced

• The proposal to introduce a tax on income from bank deposits in 2020 was announced by Russian President Vladimir Putin in his address on the situation with coronavirus. Initially, it was assumed that income from deposits and investments exceeding 1 million rubles would be taxed. According to the head of state, this measure would affect about 1% of depositors, it is already in effect in other countries of the world.

• A new tax was approved in 2021. Almost immediately, depositors received a two-year exemption. The first year for which the tax was levied was 2023. The payment took place over the next year, meaning the deadline was December 1, 2024. According to the calculations of the Ministry of Finance, state revenues from the first receipts of the deposit tax amounted to 111 billion rubles.

What are the taxes on investments?

• There are several other taxes that private investors pay on their income. In most cases, the tax is automatically withheld and paid by the broker. Thus, income from the sale of securities, futures and options (if a profit was actually made from them), from dividends on shares and coupons on bonds are taxed. At the same time, it is important that by the time the tax agent pays the contribution, the required amount is in the brokerage account, otherwise the investor will have to do everything on his own within the established time frame. The tax is charged at the personal income tax rate of 13% or 15%.

• In some cases, the investor will have to independently report income and send information to the Federal Tax Service. We are talking about income from the sale of foreign currency and precious metals, as well as income received from foreign brokers. The tax rate is also 13% or 15%, depending on the annual income. To pay the tax, you must fill out a 3-personal income tax return by April 30 of the year following the reporting year.