The Ministry of Finance proposed expanding the personal income tax progression to 22% on income over 50 million rubles.

On Tuesday, the Ministry of Finance submitted to the government a package of bills including amendments to the 2024 budget law and the 2025 and 2026 planning periods, as well as amendments to the Tax and Budget Codes. The proposals will be reviewed by the legislative committee and then at a government meeting. Their possible adoption by the State Duma during the spring session "will ensure the implementation of the president's instructions on a number of socially significant issues outlined in his address," the ministry said in a statement.

The following progressive scale for personal income tax is proposed: for income from 2.4 to 5 million rubles - 15%, for income from 5 to 20 million rubles - 18%, for income from 20 to 50 million rubles - 20%, and for income over 50 million rubles - 22%, according to the Ministry of Finance's materials.

The Ministry notes that the introduction of the progressive tax system will affect 3% of the country's working-age population. "The monthly income threshold is set at 200,000 rubles per month, which is three times higher than the average salary in the country (and even higher than the average salary in Moscow, where salaries are highest). This high threshold more than adequately accounts for individual income and family expenses. For workers with incomes below 200,000 rubles, the personal income tax rate remains at the current level of 13%," the documents state.

Increased tax rates will apply to the excess amount. For example, a 13% tax will still be levied on the base income of 2.4 million rubles (up to 200,000 rubles per month). However, someone earning 250,000 rubles per month will pay an additional 1,000 rubles (or 12,000 rubles more per year on an annual income of 3 million rubles), while someone earning 400,000 rubles will pay 4,000 rubles (or an additional 48,000 rubles per year on an annual income of 4.8 million rubles per year), the ministry explains.

Income tax refund for families with children

For parents with two or more children, whose per capita income per family member does not exceed 1.5 times the monthly subsistence minimum, the Ministry of Finance proposes introducing a 7% refund of paid personal income tax, thus effectively bringing the personal income tax rate for them to 6%.

"Under 2025 conditions, this amounts to 319,194 rubles per person per year; for example, a family of four with two children should have a total annual income of no more than 1.3 million rubles. Based on the 2025 subsistence minimum, the tax payment can be provided to parents with a monthly income of up to 53,000 rubles if both parents are employed. And no more than 106,000 rubles if only one is employed," the Ministry of Finance's preliminary calculations are cited in the materials.

According to the ministry, approximately half of all families with two or more children will receive the tax payment. it will be provided as a benefit from the federal budget.

Dividends, deposits and sale of securities

The Ministry of Finance did not propose changing the scale of progression for taxing dividends, interest income on deposits, and income from the sale of securities, but it did lower the threshold for applying the increased rate.

Thus, it is proposed to lower the threshold for applying the 15% rate when taxing personal income tax on income of individuals in the form of interest on deposits.

Starting in 2024, individuals began paying tax on interest income from bank deposits. Thus, if the income from all deposits exceeds 150,000 rubles, a 13% personal income tax must be paid on this excess. However, if the individual's total income (salary, dividends, interest on deposits, etc.) exceeds 5 million rubles for the year, the rate increases to 15%. Based on the Ministry of Finance's proposal, this amount will now be reduced to 2.4 million rubles. Below this threshold, a 13% rate will apply. No further increases are envisaged.

As the Ministry of Finance notes, this regulation will apply to a small number of citizens who have more than 16 million rubles in deposits.

Furthermore, the threshold for applying the 15% rate for personal income tax on dividend income of individuals is proposed to be lowered to 2.4 million rubles from the current 5 million rubles. The 13% rate will remain in effect for income below 2.4 million rubles.

The Ministry of Finance justifies maintaining the personal income tax rates on income from equity participation in companies in the form of dividends at the current level by citing an increase in profit tax, as well as a reluctance to interfere with the development of the stock market.

"The profit from which dividends are paid will already be subject to corporate income tax at a rate of 25%. Maintaining the dividend tax rate will also prevent the development of the stock market, which is an important component of the country's financial and economic system. People will buy company shares, providing them with financing, only if they see prospects for income, including in the form of dividends," the materials state. Furthermore, it is taken into account that many double taxation agreements with other countries set the personal income tax rate on dividends at 10-15%.

Based on the same principle, it is proposed to lower the threshold for applying the increased 15% rate to income received by individuals from the sale of securities and participation shares to 2.4 million rubles from 5 million rubles. "At the same time, the exemption for holding securities and participation shares for more than five years, under which no tax is paid on income from them, will cease to apply if the taxpayer's annual income exceeds 50 million rubles according to the relevant tax base," the documents state. The abolition of this exemption also embodies the principle of fair taxation, whereby the tax conditions for small retail investors remain unchanged, while the preference will be eliminated for high-income individuals, the Ministry of Finance explains.

Real estate

The current tax rate on sold real estate remains at 13% for amounts up to 2.4 million rubles, and increases to 15% beyond that amount. The tax exemption on income from the sale of property for individuals who have met the minimum ownership periods established by the Tax Code (five years for real estate, three years for other property) remains in full force, regardless of the taxpayer's income, according to the documents.