Unified personal income tax rate and up to 500 K rub for military registration violations

Please be informed on two potential important legal rules expected to be adopted this year.

1. Unified personal income tax rate for residents and non-residents

The new law simplifies personal income tax payment for employers (tax agents) in respect of remote employees working from abroad. Currently, it is crucial to monitor employees’ tax residency and to timely recalculate personal income tax at the increased rate of 30%. Similar rules are applied to freelancers working from abroad under service agreements for Russian companies. Employers could be held administratively liable for incorrect calculation and payment of personal income tax.

According with the new rules there will be a unified personal income tax rate for residents and non-residents in amount of 13% (or 15% for income over 5 million rubles per year). For remote employees rules may come into force in 2024, and for freelancers – in 2025.

2. New fines for violation of military registration will be up to 500 thousand rubles

While the current fines for violations in military registration are insignificant – up to 5 thousand rubles, under the new rules may reach up to 500 thousand rubles.

It is expected that since October 1, 2023, failure to provide information required for military registration may result in a fine of up to 50 thousand rubles for an official, and failure to fulfill the obligation to ensure timely notification and attendance of citizens subject to military service upon mobilization or failure to assist in notification and attendance – a fine up to 500 thousand rubles for a company, up to 80 thousand rubles for an official.