State Duma Approves Major Tax Package in Third Reading
On 18 November 2025, the State Duma adopted in the third reading a bill amending the Tax Code of the Russian Federation. The proposal has been significantly revised compared to its original version.
If finally approved, the following key changes are expected to take effect from 1 January 2026:
- Increase of the VAT rate from 20% to 22% (para. 3 Art. 164 of the Tax Code).
• Reduction of the revenue threshold for exemption from VAT obligations under the simplified taxation system: to RUB 20 million for 2025, RUB 15 million for 2026, and RUB 10 million from 2027 onwards (Art. 145 of the Tax Code).
• Amendments to the personal income tax exemption on the sale of shares/participation interests held for more than five years: it will apply only to tax residents and only to Russian companies whose assets are not predominantly composed of real estate (para. 17.2 Art. 217 of the Tax Code).
• Clarification of the taxation rules for personal income in the form of a material benefit arising when shares/participation interests are contributed to a company’s charter capital (Art. 212 of the Tax Code).
We will continue to monitor the legislative process and report on the most significant developments.
