Russia – Taxation

How does the tax system in Russia work?

The Russian Federation’s tax system is an intricate web of obligations between fiscal bodies and taxpayers, with the Russian Tax Code serving as the country’s foundational tax legislation. The Code functions as a comprehensive national framework spanning federal, regional, and local taxes; any regional or local tax rules and rates must operate within the boundaries it sets. The result is a highly centralised system, even by federal standards — a notable contrast with more fragmented fiscal arrangements found in other federations around the world.

Russia has historically favoured moderate flat or regressive tax rates and has depended significantly on revenues from the oil and gas sector. From 2025, however, the approach for individuals has changed markedly: a five-tier progressive personal income tax scale came into effect on 1 January 2025 for employees who qualify as Russian tax residents. Importantly, each rate applies only to the portion of income falling within that particular band — not to the taxpayer’s total annual earnings.

Tax resident status in Russia has nothing to do with citizenship, the type of visa or residence permit held, or where a person is officially registered to live. The sole determining criterion is whether an individual has spent more than 183 days on Russian soil within the preceding 12 months. This physical-presence approach is broadly comparable to tests used in countries such as Australia and Germany, but differs from the UK’s statutory residence test, which incorporates secondary conditions relating to employment, family ties, and accommodation — none of which feature in the Russian rules.

Under Article 207 of the Russian Tax Code, tax resident status is automatically conferred on any person — Russian citizen, foreign national, or stateless individual — who has been present in Russia for 183 days or more across any 12 consecutive months. This running count is not broken by short absences of less than six months taken for medical treatment, study, or work connected with offshore hydrocarbon operations.

Once established as a Russian tax resident, an individual is liable for tax on their worldwide income, whereas non-residents are taxed solely on income arising within Russia. Crossing the 183-day threshold obliges you to report all global income — from employment, rental, investments, and other sources — to the Russian tax authorities. The body responsible for overseeing tax administration is the Federal Tax Service of Russia (FTS), whose website at nalog.gov.ru is the definitive source for current regulations, official forms, and filing deadlines.

Does Russia have double taxation agreements, and how do they affect expats?

Double taxation agreements (DTAs) are bilateral treaties that determine which country holds taxing rights over particular categories of income, and that provide mechanisms — such as tax credits or exemptions — to prevent the same income from being taxed twice over. For expats with cross-border financial interests, DTAs are among the most valuable tools for managing tax obligations.

Since 2022, the great majority of the 84 agreements Russia had concluded with other countries have either been suspended by Russia itself or terminated by the partner states. The suspension of tax treaties between Russia and so-called “unfriendly” countries — a group that includes France, Germany, and Italy — has materially increased the double taxation exposure for expats originating from those nations.

In June 2024, the United States Treasury Department formally notified Russia of the suspension of key provisions within the US–Russia tax treaty. The suspension took effect for taxes withheld at source and for other taxes from 16 August 2024, and will remain in place unless both governments agree otherwise. This development means that expats from many Western countries can no longer rely on the treaty protections that were previously available to them.

Not every element of Russia’s DTA network has been dismantled, however. Russia continues to maintain active treaties with a number of countries, including fellow BRICS members and several nations in the Middle East and Asia. One example is the DTA concluded with Oman, which entered into force from 1 January 2024, providing a general 15% withholding tax rate on dividends along with more favourable rates for companies holding substantial stakes in dividend-paying entities.

To establish whether a DTA is currently operative between Russia and your country of origin, consult the Federal Tax Service of Russia’s official website, which publishes up-to-date treaty information. Given how rapidly this area has evolved, always confirm the current status of any treaty before making financial decisions — the position that applied several years ago may well no longer hold.

What taxes do expats need to pay in Russia?

The taxes of greatest relevance to expats residing in Russia are personal income tax, property tax, land tax, and social contributions. There is no wealth tax, and — of particular importance for estate planning — no inheritance or gift tax in most circumstances. The following sections provide an overview of each.

Personal Income Tax (PIT / NDFL)

With effect from 2025, a five-bracket progressive system applies to tax residents: 13% on annual income up to RUB 2.4 million; 15% on income from that point up to RUB 5 million; 18% on income up to RUB 20 million; 20% on income up to RUB 50 million; and 22% on income above RUB 50 million. Each rate applies only to the slice of income within its respective band — not to the taxpayer’s total annual earnings.

Passive income — including dividends, deposit interest, gains from securities transactions, and proceeds from property sales — is taxed at 13% for amounts up to RUB 2.4 million, with a 15% rate applying to amounts above this threshold. Non-residents are subject to a flat 30% rate on all Russian-sourced income. They are taxed only on income generated within Russia — such as salaries, rental income, capital gains, and dividends — and are generally not entitled to any deductions or exemptions; income from foreign sources is not subject to Russian tax for non-residents.

Russia does not permit joint filing or assessment for married couples — each individual files separately. Employers act as withholding agents for their employees, deducting PIT at source, so most employed expats will not need to submit a separate return if their only income comes from a Russian employer.

Capital Gains Tax

Profits from the disposal of shares and securities are subject to income tax. Sales of other types of property by a Russian resident are exempt from tax once a three-year holding period has been satisfied. This exemption makes long-term ownership of residential property in Russia particularly attractive. For assets sold before the three-year threshold is reached, gains are incorporated into ordinary income and taxed at the progressive PIT rates for residents, or at 30% for non-residents.

Property Tax and Land Tax

Russian property tax is levied on owners at a maximum rate of 2.5% of the cadastral value of the property as assessed on 1 January. From January 2025, the ceiling rose from 2.2% to 2.5% for properties with a cadastral value exceeding RUB 300,000,000. Landowners and owners of buildings situated on land are also subject to land tax, the rate of which is set by local authorities. The maximum land tax rate for properties with a cadastral value above RUB 300 million increased from 0.3% in 2024 to 1.5% in 2025.

Inheritance and Gift Tax

Russia levies no inheritance or gift tax. When a person dies, their heirs are not required to pay personal income tax on inherited assets. Gifts of real estate, shares, and vehicles from persons outside the immediate family circle are, however, subject to personal income tax payable by the recipient. Gifts between close relatives — spouses, parents, grandparents, children, grandchildren, brothers, sisters, and half-siblings — are exempt from this charge. Gifts made to non-residents attract tax at the 30% rate.

Wealth Tax

Russia imposes no wealth or net worth tax. This distinguishes it from certain European jurisdictions such as Spain, where an annual wealth tax is levied on global assets above a specified threshold for tax residents.

Social Contributions

Social contributions are borne by the employer and cannot be deducted from the employee’s wages. The applicable rate depends on the employee’s cumulative gross salary for the year and their immigration status. Where cumulative gross earnings remain below the maximum base, a rate of 30% applies. Earnings above that ceiling are taxed at 15.1%. From 2025, the maximum base for social contributions is set at RUB 2,759,000.

Remuneration paid to expats holding Highly Qualified Specialist (HQS) work permits is not subject to social contributions, since these individuals are not treated as insured persons within the Russian social security framework.

Are there any tax breaks or special regimes for expats in Russia?

Russia does not offer a dedicated non-domicile or remittance-based tax regime comparable to schemes such as Portugal’s former NHR programme or Italy’s flat-tax arrangement for new arrivals. Nonetheless, several mechanisms can substantially reduce the tax burden for particular categories of foreign resident.

Highly Qualified Specialist (HQS) Status

One of the most valuable benefits available to foreign nationals in Russia is HQS status, which is granted to those who meet a minimum salary threshold and hold qualifying roles. Holders of HQS work permits are exempt from social contributions, as they fall outside the insured population of the Russian social security system. In addition, HQS holders are taxed at the resident rate of 13% on their Russian employment income from the commencement of their contract, even before they have accumulated 183 days in Russia — a meaningful advantage during the early phase of an assignment. The salary threshold and other eligibility criteria are governed by Russian migration law and should be confirmed against the most current official requirements.

Self-Employed (Professional Income Tax) Regime

Individuals operating as self-employed are subject to the professional income tax regime under Federal Law No. 422-FZ. This tax is charged at 4% on income received from private individuals and at 6% on income received from legal entities. Annual income under this regime is capped at RUB 2.4 million per calendar year. The low rates make this an attractive option for freelancers and independent consultants. The self-employed regime is open to Russian citizens and to certain foreign nationals, including citizens of Belarus, Kazakhstan, Armenia, Kyrgyzstan, and Ukraine. Nationals of other countries should verify their eligibility with the FTS or a local adviser before proceeding.

Tax Deductions for Residents

Russian tax residents may access various tax deductions (вычеты) that can reduce their taxable income for PIT purposes. Subject to applicable restrictions, eligible residents may be able to claim deductions in respect of pension contributions, insurance premiums, medical expenses, and educational costs. Non-residents have no access to such deductions, making full residency financially beneficial where circumstances permit. The current list of qualifying deductions and the relevant caps should be confirmed with the FTS or a qualified Russian tax adviser, as thresholds are periodically revised.

Three-Year Property Exemption

As noted elsewhere in this guide, gains on the sale of shares and securities are subject to income tax, but proceeds from the sale of other property by a Russian resident are exempt after three years of ownership. For those considering the purchase of residential property in Russia, this represents a worthwhile long-term planning consideration.

How and when do expats file a tax return in Russia?

Russia’s tax year runs from 1 January to 31 December, and returns must ordinarily be submitted by 30 April of the year after the income was earned. Missing this deadline can lead to penalties if unpaid tax is outstanding. The return form used by individuals — both residents and non-residents — is Form 3-NDFL.

The step-by-step filing process for expats is as follows:

1. Register with the Federal Tax Service. Foreign nationals who become tax residents in Russia should register with their local tax inspectorate. Your nearest office can be located via the FTS website (nalog.gov.ru). You will be issued a taxpayer identification number (INN), which is required for all tax filings.
2. Gather your income records. Compile documentation covering all income received during the calendar year, including employment contracts, payslips, bank statements reflecting dividends or interest payments, rental income records, and any overseas income if you are a tax resident.
3. Obtain a tax residency certificate if needed. If you require formal confirmation of your tax status — for instance, to claim treaty benefits — you can apply to the Federal Tax Service for a Russian tax residency certificate. The application process typically involves submitting an application form, copies of your passport, and evidence of your physical presence in Russia.
4. Complete Form 3-NDFL. Non-residents must complete Form 3-NDFL by 30 April of the year following income receipt. Resident taxpayers with income beyond what their employer withholds at source — such as rental income, investment returns, or overseas earnings — must also file this form.
5. Submit your return. Returns may be filed electronically via the personal taxpayer account on nalog.ru (an electronic signature is required) or submitted through the FTS online portal using registration credentials obtained from the tax authority.
6. Pay any outstanding tax. Tax not withheld at source must be settled by 15 July of the filing year. Always check the current payment deadlines on the FTS website, as these may be subject to change.
7. Notify the FTS of foreign accounts. Foreign nationals recognised as tax and currency residents of Russia are legally obliged to inform the Federal Tax Service of any bank accounts and accounts held with other financial institutions abroad, and to submit cash flow statements for those accounts. Non-compliance can attract substantial penalties.

If your sole source of income is a Russian employer who withholds PIT on your behalf, you may not be required to file a separate annual return — but filing becomes necessary if you have additional income streams or wish to claim deductions. Consulting a local tax adviser with experience of expat cases is advisable to determine your precise obligations. The FTS also operates a dedicated English-language section at nalog.gov.ru/eng.

What are the tax implications of leaving Russia?

If you have been a Russian tax resident and are planning to depart, there are several important obligations you need to address before and after you leave. Handling these correctly is essential to avoid unforeseen liabilities or financial penalties.

Filing a departure return. A foreign national who has earned taxable income and plans to leave Russia must file a tax return no later than one month before their departure date. The deadline for settling any resulting tax liability is within 15 calendar days of submitting that return. This differs significantly from the standard 30 April filing deadline and frequently catches departing expats unaware.

Loss of residency status. Once you leave and your total time in Russia falls below 183 days within a 12-month period, you will cease to be a Russian tax resident. Because residency status can change at any point during the year, your tax obligations may shift mid-year. From the moment non-resident status takes effect, you will be liable for Russian tax only on any remaining Russian-sourced income, taxed at the 30% non-resident rate.

Ongoing obligations on Russian-sourced income. If you continue to receive income from Russian sources after leaving — for example, rental income from property you retain in Russia — that income will remain subject to Russian tax at the 30% non-resident rate. While resident landlords are taxed at the progressive rate, non-residents face the 30% charge, which is typically withheld at source.

Currency reporting and foreign account obligations. If a foreign national has received a dividend payment into an account in a country that does not exchange tax information with Russia, that currency transaction may be deemed unlawful under Russian law and attract a penalty of 75% to 100% of the transaction amount. All outstanding currency obligations should be resolved before departure.

Property and capital gains. If you intend to sell Russian property after leaving the country, bear in mind that the three-year exemption from capital gains tax applies to residents only. As a non-resident, any profit from the sale of Russian property will be subject to the 30% non-resident PIT rate. The timing of any disposal deserves careful consideration — ideally with specialist advice — before you formally exit Russian tax residence.

Practical tips for managing taxes as an expat in Russia

• Keep a precise record of your days in Russia from the outset. The 183-day threshold is based on actual physical presence, and even a partial day counts as a full day — regardless of whether you arrive late at night or leave early in the morning. Maintain a contemporaneous log supported by passport stamps, travel bookings, and accommodation receipts.
• Obtain your INN without delay. Register with the Federal Tax Service and secure your Individual Taxpayer Number (INN) as soon as you arrive. This number is needed for employment, banking, and all tax filings, and late registration can create complications with subsequent compliance requirements.
• Investigate the DTA landscape thoroughly before relocating. Since 2022, the vast majority of Russia’s 84 tax agreements have been either suspended or terminated. If you receive income in your home country, you may now face tax liability in both jurisdictions. Confirm the current status of any relevant treaty through the FTS or a qualified adviser before making your move.
• Report overseas accounts to the FTS promptly. Russian tax residents are legally required to disclose all foreign bank and financial accounts to the authorities. Failing to meet Russian currency law requirements can result in fines of 75–100% of the relevant transaction amount. Seek professional guidance on these obligations as early as possible.
• Time asset disposals around your residency dates. The three-year capital gains exemption on property applies exclusively to Russian tax residents. If you are contemplating the sale of Russian assets, assess whether completing the transaction before losing residency status — or after three years of resident ownership — would lead to a more favourable outcome.
• Activate your nalog.ru online account early. The FTS provides a personal taxpayer portal at nalog.gov.ru through which you can view your tax position, submit returns, and access official correspondence. Setting this up from the start simplifies compliance considerably.
• Engage a specialist adviser. The convergence of a rapidly evolving progressive tax structure, widespread DTA suspensions, currency control obligations, and nuanced residency rules makes Russia a particularly demanding jurisdiction for internationally mobile individuals. Professional advice from someone with specific expertise in expat and cross-border taxation in Russia can be decisive in avoiding unexpected liabilities and ensuring full compliance.

Frequently asked questions

When do I become a tax resident in Russia?

Under Article 207 of the Russian Tax Code, tax resident status is automatically conferred on any individual who has spent 183 days or more on Russian territory across any 12 consecutive months. This rule applies irrespective of nationality or visa category. The days concerned do not have to be consecutive — they are simply accumulated over the relevant period.

Am I taxed on my worldwide income as a Russian tax resident?

Yes — Russian tax residents are liable for tax on their worldwide income. Once you surpass the 183-day threshold, you must declare and pay Russian tax on earnings from all sources globally, including employment income, rental receipts, dividends, and pensions received abroad, subject to any applicable DTA relief. Always confirm whether a DTA is currently operative between Russia and any other country in which you have a tax connection.

What is the income tax rate for expats who are not yet tax residents?

Non-residents in Russia are taxed at a flat rate of 30% on all Russian-sourced income. Income arising outside Russia is not subject to Russian tax for non-residents. The 30% rate applies from the very first day if you have not yet reached the 183-day threshold — there is no reduced introductory rate for non-residents, with the exception of those holding HQS work permits.

Is there an inheritance or gift tax in Russia?

Russia does not levy any inheritance or gift tax. When someone dies, their heirs are not required to pay personal income tax on what they inherit. Gifts of real estate, shares, and vehicles received from persons outside the immediate family are, however, subject to personal income tax payable by the recipient. Gifts from close relatives — including spouses, parents, grandparents, children, grandchildren, and siblings — are exempt from this charge.

Can I avoid double taxation if I pay tax in Russia and my home country?

Since 2022, the vast majority of Russia’s 84 tax treaties have been suspended or renounced by the relevant states. Where no DTA is currently in force between Russia and your home country, the same income may be taxed in both places with no formal mechanism for relief. You should verify the current status of any relevant treaty through the FTS website and obtain professional advice before making financial decisions.

What is the tax filing deadline in Russia?

The Russian tax year coincides with the calendar year, and returns must ordinarily be filed by 30 April of the year following the one in which income was earned. However, foreign nationals intending to leave Russia must submit their return no later than one month before their departure. Late filing can attract penalties where tax remains unpaid. Current deadlines and forms are available at nalog.gov.ru.

Is there a wealth tax or net worth tax in Russia?

Russia imposes no wealth or net worth tax. There is no annual obligation for individuals to declare or pay tax based on the total value of their assets. Property tax and land tax apply to specific assets, but these are charges levied on individual holdings rather than a comprehensive levy on overall wealth.

How are social security contributions handled for expat employees?

Social contributions are payable by the employer and cannot be deducted from the employee’s wages. As an employee, your net pay is therefore not directly reduced by social contributions — they represent an additional cost borne by your employer. Expats holding Highly Qualified Specialist (HQS) work permits are not subject to social contributions at all, as they do not fall within the insured population of the Russian social security system. The current HQS salary threshold should be verified with the FTS or a specialist adviser, as it is set by regulation and may change.