Increased NDPL earnings evaluated by FNS in 2024 financial analysis
Cashin' In: A Look at Russia's Progressive Tax Overhaul
Last year, the Russian government taxed labor income, dividends, and profits of controlled foreign companies above 5 million rubles per annum at a rate of 13%, with a 2% credit to the federal budget. But, hold on to your rubles, folks, because things are about to heat up in the Russian tax world!
According to "Vedomosti," the additional Non-Resident Federal Payments (NDFP) income for 2024 has seen a whopping 29% increase compared to 2023, raking in an additional 159.5 billion rubles from individuals earning 5 million rubles or more. This revenue haul was 19.5% higher than the 181 billion rubles forecasted by the Ministry of Finance.
Moscow led the pack, contributing a colossal 110 billion rubles, or 49%, to the federal budget in terms of additional NDFP receipts. In total, 56.3 trillion rubles in taxes were collected for the Russian budget system in 2024, marking an 9.5 trillion ruble increase compared to the previous year.
The taxman's bunch reported that 32.8 trillion rubles in non-oil and gas revenues, 8.1 trillion rubles in profit tax, 8.4 trillion rubles in NPDI, and 8.4 trillion rubles in NDFP were harvested for the Russian budget in 2024.
Since 2025, the progressive NDFP scale has been more than just a couple of steps ahead, featuring five escalating tiers. In the past, the rate for incomes above 5 million rubles per year was either 13% or 15%. However, times have changed, my friends.
Now, individuals earning less than 2.4 million rubles per year are still saddled with a 13% tax rate. But, the olive branch doesn't get extended that far. Those with incomes ranging from 2.4 million to 5 million rubles now face a tax of 15%. Incomes from 5 million to 20 million rubles will be taxed at 18%, while the bracket between 20 million and 50 million rubles will see a rate of 20%. And, for those earning more than 50 million rubles, the tax bites even harder at 22%. The increased tax is only levied on the amount surpassing the thresholds. The Ministry of Finance estimates that the revised progressive NDFP scale will generate an extra 533 billion rubles in budget revenue in 2025.
So, there you have it – the Russian progressive tax landscape has undergone some sizable revisions. It's time to keep your eyes on that ruble and make sure you're in the know about any changes that might come your way!
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In the year 2024, the Russian budget saw an additional 159.5 billion rubles from individuals earning 5 million rubles or more, due to a 29% increase in Non-Resident Federal Payments (NDFP) income.
Moscow alone contributed a significant 110 billion rubles, or 49%, to this increase, contributing heavily to the 56.3 trillion rubles in total taxes collected for the Russian budget.
The Ministry of Finance predicts that the revised progressive NDFP scale for 2025 will generate an extra 533 billion rubles in budget revenue.
The new progressive NDFP scale features five escalating tiers, with different tax rates for various income brackets, ranging from 13% for incomes less than 2.4 million rubles to 22% for incomes over 50 million rubles.
