Tax Planning
How to Manage Russia’s 2026 Tax Reforms: Tax Planning for Individuals & Businesses
Russian tax policy underwent sweeping changes as of January 2026—from higher VAT to phased reductions in thresholds for simplified regimes. Here’s how individuals and companies can stay ahead and plan accordingly.
By NomadicTax Research Team • 5-8 min read • August 28, 2026
## Overview of Key Reforms
Russia’s Federal Law No. 425-ФЗ of 28 November 2025 brought in a comprehensive tax reform effective **1 January 2026**. Major changes include an increase in the **standard VAT rate** from **20% to 22%**, tighter thresholds for the simplified tax regime (УСН) and patent (ПСН) systems, progressive personal income tax for EAEU residents, and restrictions on using past losses to reduce future taxable income. ([nalog.gov.ru](https://www.nalog.gov.ru/new2026/?utm_source=openai))
## Tax Planning for Individuals
### 1. Progressive income tax (НДФЛ)
If you're a resident of an EAEU country (Russia, Belarus, Kazakhstan, Armenia, Kyrgyzstan), income from your labor activities now follows Russia’s progressive scale. Factor this into compensation negotiations. ([nalog.gov.ru](https://www.nalog.gov.ru/new2026/?utm_source=openai))
**Example:** An engineer earning 3 million rubles/year should estimate higher deductions and contributions—structures like bonuses paid in arrears might push them into higher marginal brackets.
### 2. Timing deductions & income recognition
Tax deductions for health, education and certain expenses are now limited or removed for foreign agents. To maximize benefits, plan when you incur expenses like medical premiums or donations and ensure all eligible paperwork is completed within the tax year. ([nalog.gov.ru](https://www.nalog.gov.ru/new2026/?utm_source=openai))
## Planning for Businesses & SMEs
### 1. Be careful with special regimes (УСН, ПСН)
Thresholds for simplified and patent regimes have been gradually reduced: from **20 million rubles in 2026**, to **15 million in 2027**, and **10 million** thereafter. If you expect to cross these, assess whether to migrate early to general regimes with full VAT but full deductions. ([nalog.gov.ru](https://www.nalog.gov.ru/new2026/?utm_source=openai))
### 2. VAT strategy
With the rate rise to **22%**, and stricter rules when incomes exceed thresholds, businesses should:
- Review pricing to maintain margins post-rate increase.
- Assess whether continuing under reduced VAT rates (5% or 7%) is viable, and monitor income limits—exceeding them forces transition to higher rates. ([nalog.gov.ru](https://www.nalog.gov.ru/rn33/news/seminar/16630172/?utm_source=openai))
### 3. Limits on past losses
New rules impose a **50% cap** on how much of a past year loss can offset income in future periods, and this is extended through **31 December 2030**. Plan capital expenditures and losses accordingly. ([nalog.gov.ru](https://www.nalog.gov.ru/rn08/news/tax_doc_news/16635731/?utm_source=openai))
## Practical Steps & Checklists
- Update accounting systems to compute VAT at **22%** and track thresholds for regime transitions.
- Engage employees in collecting certificates and supporting documents early to use deductions.
- Forecast income over full year rather than by quarter; markets like trade, food service can spike revenues unexpectedly.
- Consult regional tax rules: some deductions/tax-credits depend on the region of activity (subjects of RF).
- Review contracts for advance payments, that might now trigger VAT or alter income recognition for new rates.
**Bottom line:** The 2026 tax reforms in Russia make planning essential—not just compliance. Act early, especially if you're near revenue thresholds or rely heavily on deductions or special regimes.