Minus one: the barrier in the form of a higher personal income tax rate has been removed

The increased personal income tax rate (30%) applied to the earned income of citizens of EAEU member states, which was in effect in the Russian Federation, has been abolished.

The Russian Tax Code defines two basic personal income tax rates: from 13% to 22% for tax resident individuals and 30% for non-residents.

Previously, citizens of EAEU member states employed in Russia were taxed at a 13% rate from the first day of employment. However, at the end of the year, the rate could be recalculated to a 30% rate if they did not accumulate 183 days of stay in the Russian Federation and did not become tax residents.

This practice complicated employment, led to overpayments, and violated the principle of equal treatment enshrined in the Treaty on the EAEU.

In June of this year, the EEC Board recognized the recalculation of the personal income tax at an increased rate as a barrier and sent a notice to the Russian Federation requesting its elimination.

On November 28, the Russian Federation adopted a law establishing personal income tax rates for citizens of EAEU member states working in Russia that are similar to the rates at which Russian citizens are taxed. Now, the income of citizens of EAEU member states will be taxed at a rate of 13% to 22%, with no subsequent recalculations at the end of the year.

The new provisions will come into force in 2026.

For information: in the Republic of Kazakhstan, the personal income tax rate for hired workers is 10% and applies equally to residents and non-residents, regardless of the length of their stay in the country.