On March 24, 2025, Russian lawmakers proposed increasing income tax to 30% for all foreign workers with employment patents. This would replace the current progressive tax system (13-22%) and significantly raise costs for migrant workers and employers.
Key Provisions
1. New Tax Rates
- Flat 30% rate for all non-resident workers
- Applies to all patent holders regardless of income
- Would take effect January 2026 if approved
2. Comparison of Systems
|
Parameter |
Current |
Proposed |
|
Minimum Rate |
13% |
30% |
|
Maximum Rate |
22% |
30% |
|
Progressive Scale |
Yes |
No |
3. Potential Impacts
- 15-20% increase in labor costs
- Risk of increased undeclared employment
- Possible reduction in legal migrant workers
- Need to restructure compensation packages
Recommendations
- Consider obtaining temporary/permanent residence status
- Review tax residency options (183+ day rule)
- Consult migration and tax specialists
Frequently asked questions
1. When would changes take effect?
Not before January 1, 2026 if approved.
2. Who would be affected?
All foreign workers with employment patents.
3. How is tax currently calculated?
Progressive scale: 13% (<5M RUB), 15% (5-20M), 22% (>20M).
4. Will there be a transition period?
Not included in current draft.
5. Will patent fees change?
No, but monthly tax payments would increase.
6. How to reduce tax burden?
Obtain residence permit or tax resident status.
7. Documents for tax residency?
Proof of 183+ days in Russia (rental agreements, tickets etc).
8. How to track bill status?
On the official State Duma website.
9. Any exceptions planned?
None in current draft version.
10. How to calculate new tax?
Salary × 30% (e.g. 50,000 RUB → 15,000 RUB tax).
11. What should employers do?
Review payroll budgets and documentation.
12. Most affected industries?
Construction and agriculture sectors.
13. Will enforcement increase?
Likely stronger tax compliance monitoring.
Photo source: https://ru.123rf.com/
For more information, please contact the consultants of the Confidence Group company.
* The texts of the newsletters are intellectual property of Confidence Group, protected by the copyright laws of Russia. The information may not be reproduced in any form whatsoever without linking to this web site or to pages of this website.
