Tax Planning
Planning for Russia’s Frozen Simplified Tax Threshold & What It Means for Small Businesses
With the 20 million RUB threshold for USN to remain until 2029, small businesses have breathing room—but must plan carefully around eventual reduction to 15M and 10M rub.
By NomadicTax Research Team • 5-8 min read • August 14, 2026
## What Is the Simplified Tax System (УСН) Threshold Freeze?
- On **4 July 2026**, Russian President signed **Federal Law No. 228-ФЗ**, preserving the **20 million RUB** turnover limit under USN (simplified system) for registration of VAT obligation through **2029**. ([nalog.gov.ru](https://www.nalog.gov.ru/rn46/news/activities_fts/16636927/?utm_source=openai))
- Originally it was set to decline: **15 million RUB in 2027**, **10 million from 2028**. The law now delays any changes until **2029**. ([nalog.gov.ru](https://www.nalog.gov.ru/rn92/news/activities_fts/16635476/?utm_source=openai))
## Tax Planning Opportunities and Risks
**Opportunities:**
- Businesses near the limit (e.g. earning ~18–19 million RUB) can **delay VAT registration** until 2029, avoiding extra obligations like filing VAT returns, input VAT accounting, invoicing. This stabilizes budgeting and systems.
- Maintains certainty for small enterprises to avoid costly transitions or hiring tax specialists prematurely.
**Risks:**
- Jumping over 20 million RUB during this period still triggers VAT liability. Growth savvy businesses need accurate tracking to avoid surprises.
- Even under USN, VAT obligations might creep in via business changes (e.g. infrastructure, product lines). Therefore, monitor revenue projections.
## Practical Planning Tips
- Maintain clear forecasting of monthly turnover. If crossing 20 million RUB at any point, you must register for VAT starting the subsequent month.
- Reassess whether growing revenues would justify early registration of VAT (so as to claim input credits), especially if costs incur significant VAT.
- Consider optimizing business structure: splitting operations across entities (with care to anti-avoidance rules) to stay under thresholds where beneficial.
## Example Use Case
A chain of design studios in Moscow expects revenue of 19 million RUB in 2026 and plans expansion in 2027. With threshold frozen until 2029, no VAT required unless exceed 20 million. If growth projections hint toward 22 million, registering early might allow claiming VAT on capital equipment purchases which outweighs administrative burden.
## Bottom Line
- The threshold freeze offers **certainty and relief** to small and medium businesses until **2029**. Don't rely on this being permanent—strategic planning still needed for the horizon post-2029.
- Use the extra time to strengthen internal invoicing, VAT-related accounting, and decide whether staying under or going over the threshold aligns with your growth strategy.