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Amendment of the CFC profit tax regime

DATE: July 15, 2024 | AUTHOR: AT

The President of the Russian Federation signed the Federal law amending the CFC profit tax regime.

According to the amendments to the Russian Tax Code, as for 2024 tax period the CFC’s imputed profit that shall remain in the amount of RUB 34,000,000 regardless of the number of the taxpayer’s CFCs (i.e. PIT equals RUB 5,000,000).

Starting from the 2025 tax period, the amount of CFC’s imputed profit depends on the number of the taxpayer’s CFCs:

  • One CFC – RUB 27,990,000 (i.e. the PIT of a taxpayer with one CFC would be RUB 5,000,000 in accordance with the new PIT rates);
  • Two CFCs – RUB 52,718,000 (PIT would be RUB 9,999,960);
  • Three or four CICs – RUB 52,718,000 + RUB 22,727,300 for each subsequent CFC (PIT would be RUB 14,99,966 if there are 3 CFCs);
  • Five or more CFCs – RUB 120,899,900 (PIT would amount to RUB 24,999,978).

NB: Please note that the calculations are indicative. The calculations are based on the presumption that the taxpayer has only the imputed CFC profit income.

Taxpayers may stop application of such regime by submitting a notification to the Russian Tax Authorities even if the mandatory period is not expired since the amendment to the Russian Tax Code result in increase of the payable tax.

The Federl law also introduces significant changes to PIT, corporate income tax and VAT. Read more about the changes in our telegram channel.

We are monitoring the changes and will keep you updated.

If you have any questions on this subject, you may contact our lawyers:

Tatiana Astahova astahova@atlawyers.com and Vlada Kovaleva kovaleva@atlawyers.com

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