Changes to the Tax Code of the Russian Federation in 2026 (Part 2)

Denuo's tax practice continues its series of publications with an overview on key changes to the Tax Code of the Russian Federation.

In the first issue published on 27 January 2026, we addressed the key changes to the Tax Code of the Russian Federation (“Russian Tax Code”) introduced by Federal Law No. 425-FZ of 28 November 2025 (“Law”) in relation to tax administration and tax control.

In today's overview, we will briefly examine innovations in the taxation of legal entities.

VAT

1. The Law redefines the procedure for determining the VATable item in transactions involving the transfer of real property that is seized for state and municipal needs. A new paragraph, paragraph 30, was added to article 146, clause 2 of the Russian Tax Code. According to this new paragraph, the transfer of real property that is seized for state and municipal needs and the payment of reimbursement (compensation) to the taxpayer in connection with such seizure is not treated as a taxable transaction (For more information on changes to the VAT and profits tax assessment procedure in the case of the seizure of property for state (municipal) needs and payment of reimbursement (compensation) for such seizure, please refer to the material prepared by partner Igor Venediktov in cooperation with associate Ksenia Grigorieva).

Previously, article 146, clause 2, paragraph 5.1 of the Russian Tax Code (no longer in effect since 1 January 2026) did not contain any reference to reimbursement (compensation) payable from the budget/treasury in relation to these transactions.

2. A VAT rate increase of up to 22%. The Law has introduced amendments to article 164, clause 3 of the Russian Tax Code and set the general VAT rate at 22% instead of the previously applicable 20% rate. The increased VAT rate has been in effect since 1 January 2026.

At the end of 2025, the Federal Tax Service of Russia issuedLetter of the Federal Tax Service of Russia No. СД-4-3/11802@ dated 29 December 2025 a clarification in which it highlighted problematic issues regarding changes to the VAT rate in relation to continuing contracts concluded before 1 January 2026. The main point that the agency draws attention to is that for continuing contracts there are no exceptions regarding the application of the increased VAT rate. Consequently, goods, work, services and property rights transferred starting from 1 January 2026 are taxed at a rate of 22%, regardless of the date and conditions of the conclusion of contracts for the sale of such goods, work, services and property rights.

With regard to specific issues arising in connection with the application of the increased VAT rate to ongoing contractual relationships, the Federal Tax Service of Russia referred to its clarificationLetter of the Federal Tax Service of Russia No. СД-4-3/20667@ dated 23 October 2018 issued in connection with an increase in the VAT rate from 18% to 20% in 2019. The agency stated the following:

• the shipment of goods and the transfer of property rights, results of work performed and services rendered after 1 January 2026 on account of an advance payment received before 1 January 2026:
• in the case of the shipment of goods or the transfer of property rights, results of work performed and services rendered after 1 January 2026 on account of an advance payment received before 1 January 2026, VAT shall be assessed at the rate of 22%;
• if the buyer makes an additional payment of 2% after 1 January 2026, such additional payment shall be classified by the Federal Tax Service of Russia as an additional payment of tax requiring the seller to issue a correction VAT invoice for the difference between the initially assessed VAT and the new amount calculated taking into account the additional payment; and
• if such additional payment was made before 1 January 2026, then it is recognised as an additional payment on account of the cost on which VAT must also be charged at a rate of 20%. In this case, a correction VAT invoice must be issued for the difference between the amount of the advance payment received and the new cost of the goods calculated taking into account the additional payment;
• in the case of a change – from 1 January 2026 – in the cost of goods, property rights, work or services delivered (transferred) before the specified date, a correction VAT invoice will be issued at the rate of 20% that was in effect on the delivery (transfer) date;
  
  in the case of corrections to the VAT invoice in relation to goods, property rights, work and services delivered (transferred) before 1 January 2026, the corrected VAT invoice must show the rate of 20% that was in effect on the delivery (transfer) date;
• return after 1 January 2026 of goods delivered before 1 January 2026:
• in the case of the return of goods, the seller issues a correction VAT invoice to the amount equalling the cost of the returned goods, regardless of the date of such return.
  
  The correction VAT invoice must show the 20% VAT rate that was in effect as at the date of the sale of goods. Therefore, in the case of the return of goods the seller will deduct VAT at the rate of 20%; and

• in the case of the return of goods, the purchaser reinstates the VAT earlier deducted on the basis of a correction VAT invoice issued by the seller at the rate of 20%; and
• when transferring payment to a foreign supplier, the Russian person, as the tax agent, will assess VAT only at the moment of payment. Accordingly, where the payment is made before 1 January 2026, VAT will be calculated at the rate of 20% and will not be subject to recalculation regardless of the date of the delivery of goods (transfer of property rights, results of work or services).

Further to this, in connection with a change in the VAT rate, the Government of the Russian FederationResolution of the Government of the Russian Federation No. 26 dated 23 January 2026 (the document enters into force from 1 April 2026) and the Federal Tax Service of RussiaLetter of the Federal Tax Service of Russia No. СД-4-3/11730@ dated 26 December 2025. Please note that document forms approved by the Federal Tax Service of Russia apply before the entry into force of Resolution of the Government of the Russian Federation No. 26 dated 23 January 2026 developed new forms of VAT invoices, purchase and sales ledgers applicable since 1 January 2026.

The Law establishes that the amount of VAT is to be calculated by foreign organisations that must be registered for tax in accordance with article 83, clause 4.6 of the Russian Tax Code and such VAT equals the tax computation rate of 18.03% of the percentage portion of the tax base.

Similarly, the Law determines that where an enterprise is being sold as a whole as a property complex, for each type of property the sale of which is taxed, the taxpayer must indicate a tax computation rate of 18.03% and the tax amount that corresponds to the tax computation rate of 18.03% of the percentage portion of the tax base.

3. The procedure for granting certain VAT concessions has been revised. With effect from 1 January 2026, transactions carried out by investment platform operators from an exhaustive listMore specifically, raising investment based on investment sourcing agreements and investment promotion agreements; providing the opportunity, to persons who are not investors or persons raising investment, to acquire or accept digital utility rights for accounting purposes when they are disposed of; settling accounts using the nominal accounts opened by such operators in connection with the exercise of digital utility rights; identifying investment platform users on behalf of other investment platform operators, information system operators and digital financial asset exchange operators. set out in article 149 of the Russian Tax Code are exempt from VAT.

The abovementioned exemption does not apply to advisory services and services involving the grant of rights to use computer programmes.

The Law also stipulates that services provided by investment platform operators are exempt from VAT provided that such services are directly related to investment sourcing activities (according to the list of servicesThe list is approved by Resolution of the Government of the Russian Federation No. 17 dated 14 January 2023 approved by the Government of the Russian Federation).

At the same time, the Law has introduced amendments to article 149, clause 3 of the Russian Tax Code pursuant to which the tax concession applicable to bank card services and transactions involving technical and information exchange between parties involved in settlements, including the provision of information on bank card transactions, was cancelled with effect from 1 January 2026.

In order to resolve any disputable issues arising from the cancellation of tax concessions on bank card transactions, the Ministry of Finance of Russia issued a clarificationLetter of the Ministry of Finance of the Russian Federation No. 03-07-05/126006 dated 24 December 2025 setting out the following:

• From 1 January 2026, the VAT exemption will no longer apply to transactions involving bank card services:
• carried out in relation to natural persons (for example, the issuance and servicing of bank cards);
• card-acquiring services;
• services facilitating information and technological exchange between parties involved in settlements (e.g. processing); and
• other transactions associated with the servicing of bank cards which do not constitute banking transactions;
• at the same time, the Ministry of Finance of Russia stated that the tax concession continues to apply to the following transactions, which are exempt from VAT:
• transfers of funds via bank accounts used for bank card transactions;
• payments via the Faster Payment System (FPS); and
• banking services involving the provision of information on transactions in such bank accounts and on the balance of funds held therein.

4. A special procedure is established for the VAT treatment of transactions involving digital utility rights (“DURs”) carried out via an investment platform. Article 154 of the Russian Tax Code has been amended to include two new provisions on the procedure for determining the tax base for transactions involving DURs. The amount paid for the purchase of DURs is treated as an advance payment against future delivery. Subsequently, when goods are delivered in satisfaction of an obligation arising from a DUR, the tax base is calculated as the value of that DUR, which is determined on the basis of the purchase price paid by the first acquirer for the digital right, excluding the amount of VAT. However, such value may not in any case be less than the value of such goods (work or services), exclusive rights to the results of intellectual activity and/or rights to use the results of intellectual activity, calculated on the basis of market prices prevailing as at the date of the acquisition of the said digital right by the first acquirer, including excise duties (for excisable goods) and excluding the amount of VAT.

In this context, the satisfaction of an obligation involving a DUR is understood to mean the discharge of that obligation in connection with the transfer of goods (performance of work or provision of services) or exclusive rights to the results of intellectual activity and/or rights to use the results of intellectual activity, the right to demand the transfer (performance or provision) of which constitutes this digital utility right.

However, the transfer of certificated securities or the payment of cash shall not be deemed to constitute the satisfaction of an obligation where the right in question is a DUR.

5. Corresponding amendments in relation to DURs have also been made to article 171 of the Russian Tax Code. According to these amendments, the amounts of VAT calculated by the taxpayer and paid to the budget/treasury upon receipt of the payment or partial payment under a contract for the acquisition of a DUR concluded using an investment platform are eligible for deduction, provided that the obligation is satisfied through the transfer of goods (performance of work or provision of services) or exclusive rights to the results of intellectual activity and/or rights to use the results of intellectual activity the sale of which is exempt from tax or is taxable at a rate of 0%.
However, deductions are to be made after the transfer of goods (performance of work or provision of services) or exclusive rights to the results of intellectual activity and/or rights to use the results of intellectual activity in satisfaction of obligations, claims in respect of which constitute a DUR.

6. The amendments to the Russian Tax Code have extended the deadline for claiming VAT refunds. Amendments have been made to article 176.1, clause 2, paragraph 8 of the Russian Tax Code under which taxpayers are entitled to claim a refund of VAT for the tax periods of 2026 by submitting a claim.

7. The Law introduces a provision that clarifies the procedure for performing obligations under a bank guarantee or surety agreement in the case of a VAT refund. According to the new rules, whereby violations are identified during a desk tax audit and the amount of tax refunded does not exceed the amount of VAT that is to be refunded as a result of the desk tax audit, within seven days of the date of the desk tax audit report (or an addendum to the desk tax audit report), the tax authority shall notify the guarantor who issued the bank guarantee or surety of the release from obligations under the bank guarantee or surety agreement.

8. The Law clarifies the definition of the place of sale of goods. Article 147(1), clause 2 of the Russian Tax Code does not apply to goods of the Eurasian Economic Union (“EAEU”) that are sold via an electronic trading platform to an individual receiving the goods in another member state of the EAEU. The article was supplemented by a condition regarding the receipt of goods in another member state.

9. The Law clarifies the procedure for determining the place of business of the purchaser of mining infrastructure leasing services. The Law has introduced amendments to article 148, clause 1, paragraph 4 of the Russian Tax Code. According to the amendments, the place of purchaser's business is deemed to be the Russian Federation only if the lessee of the mining infrastructure is physically present in the Russian Federation when leasing mining infrastructure.

10. In addition, the Law has clarified the details that must be included in a VAT invoice. According to article 169, clause 5, paragraph 4 of the Russian Tax Code it is now necessary to specify the serial number and date of issue of the VAT invoice issued upon the receipt of the payment, partial payment or other payments on account of future supplies of goods (performance of work or provision of services), or the transfer of property rights, which are to be set off against the specified amounts of payment or partial payment. Corresponding amendments have also been introduced in the Rules for Filling In a VAT InvoiceApproved by Resolution of the Government of the Russian Federation No. 1137 dated 26 December 2011. They will enter into force on 1 April 2026.

As for sole traders, they must specify their OGRNIP number and the date it was assigned in the VAT invoice. Corresponding amendments have been made to article 169, clause 6 of the Russian Tax Code.

IT benefits

1. The VAT concession for Russian software remains in place. The original draft law proposed abolishing the VAT concession for transactions involving software included in the Russian software register. This initiative sparked lively debate within the business community, leading the Russian Government to agree to postpone it.

Therefore, transactions involving the transfer of exclusive rights to Russian software remain exempt from VAT.

2. The preferential profits tax rate and reduced social security contribution rates for IT companies have been lifted for Skolkovo residents. The Law has amended article 284, clause 1.15 of the Russian Tax Code pursuant to which the preferential corporate profits tax rate applicable to IT companies does not apply to organisations resident in the Skolkovo Innovation Centre.

Similarly, amendments have been made to article 427, clause 5 of the Russian Tax Code which exclude the application of the reduced insurance contribution rates applicable to IT companies to organisations resident in the Skolkovo Innovation Centre.

3. In addition, the procedure for applying reduced insurance contribution rates to IT companies has been amended. The Law has amended article 427 of the Russian Tax Code. More specifically, clause 2.2-2 was added to the article, pursuant to which a 15% rate will apply to IT organisations from 2026 if the total amount of payments to insured persons does not exceed the threshold for insurance contributions (for 2026 – RUB 2,979 mlnApproved by Resolution of the Government of the Russian Federation No. 1705 dated 31 October 2025).

Payments exceeding the threshold are subject to the former rate of 7.6%.

Profits tax (excluding the taxation rules for multinational enterprises)

1. The Law has clarified the definition of revenue. Where property (property rights) is transferred, work is performed or services are provided in satisfaction of pre-existing monetary obligations not related to the transfer of such property (property rights) or the performance of such work or the provision of such services, the sales revenue is determined as the amount of the obligation being settled, taking into account the provisions on determining the market price under article 105.3 of the Russian Tax Code.

2. The procedure for determining tax-exempt profits has been clarified.

The following amendments were introduced to article 251 of the Russian Tax Code:

• The Law has clarified article 251, clause 1, paragraph 14, item 13 of the Russian Tax Code, according to which exempt are profits in the form of funds from co-investors and/or investors accumulated in the developer's accounts. It was additionally mentioned that the exemption applies to funds transferred to the developer from escrow accounts, where there are other properties that have not yet been commissioned and the construction of which is provided for in connection with the performance of an off-the-plan contract.
• The Law clarifies the provisions of article 251, clause 64 of the Russian Tax Code. The exemption applies to income in the form of property, property rights, results of work and services received by an organisation free of charge, provided that the legislation of the Russian Federation, the legislation of the constituent territories of the Russian Federation and acts of the Government of the Russian Federation impose an obligation on that organisation to assume ownership of such property, property rights, results of work and services. However, the exemption does not apply to income received in the form of cash.
  

3. The Law clarifies the list of assets that are not subject to depreciation. According to the revised article 256 of the Russian Tax Code, from the category of assets that are not subject to depreciation, the Law excludes the assets acquired (created) using budgetary funds allocated for specific purposes.

4. The amendments clarified the procedure for applying a multiplying coefficient to expenditures for the acquisition of rights to software and databases. The Law amended article 264 of the Russian Tax Code, pursuant to which the 2x multiplier now applies to expenditures for the acquisition of rights to software and databases only where contracts for the acquisition of such rights do not provide for the possibility of the subsequent transfer of those rights to third parties.

From 1 January 2026, the option to claim a deduction for the cost of acquiring rights to software and databases will only be permitted where taxpayers acquire such rights for their own use.

The Law clarifies the list of non-operating expenses. A clarification was introduced to article 265, clause 1, paragraph 19.6 of the Russian Tax Code that non-operating expenses include expenses in the form of the value of assets (including cash) transferred free of charge as donations to non-profit organisations, provided that such transfer is made in the form of a donation. This implies the need to properly document such donations in accordance with the requirements for the transfer of donations.

5. The amendments broaden the definition of a doubtful debt and irrecoverable debt.

According to the revised article 266 of the Russian Tax Code, doubtful debts now also include debts owed to a taxpayer in respect of fines, penalties and other sanctions under contracts under which there are debts arising from the performance of such contract and such debts have been recognised as doubtful. For the purposes of article 266 of the Russian Tax Code, debts in respect of fines, penalties and other sanctions must be confirmed by a court ruling.

According to the Law, a bad debt (irrecoverable debt) is an amount of debt liabilities owed to a foreign organisation in the form of interest, fines, penalties and/or other sanctions, which are recognised by the taxpayer as income in accordance with the provisions of article 271, clause 4, paragraph 14.7 of the Russian Tax Code and in respect of which the obligations have been terminated in connection with their forgiveness subject to the conditions specified in article 310, clause 2, paragraph 13 of the Russian Tax Code (For more information on the new approaches towards the taxation of foreign holding companies' income in the form of debt forgiveness, please refer to our material where we have conducted a detailed analysis of the matter and formulated practical conclusions on the application of new provisions of the Russian Tax Code.).

Debt shall not be recognised as irrecoverable debt if it corresponds to the amount of income for which the recognition date, in accordance with article 271 of the Russian Tax Code, has not yet occurred at the time of writing off that debt.

6. The Law has broadened the list of expenses that are not included in the tax base. A new paragraph, paragraph 68, was added to article 270, clause 1 of the Russian Tax Code. According to it, the list of expenses has been broadened to include expenses in the form of costs (losses) incurred using funds received by the taxpayer as compensation for losses suffered as a result of the expropriation of the taxpayer's property for state or municipal needs.

In addition, a new paragraph, paragraph 48.37, was added, which supplemented the list with expenses incurred in connection with the obtainment of an investment tax deduction under article 286.1 of the Russian Tax Code. These expenses do not exceed 100 percent of the costs specified by the legislation of the constituent territory of the Russian Federation within whose territory the decision to introduce an investment tax deduction is taken in relation to such expenses.

7. The Law establishes accounting rules for certain incomes and expenses.

The amendments have established the procedure for recognising the incomes of Russian organisations in the form of interest on debt liabilities of a foreign organisation and in the form of fines, penalties and other sanctions for breach of contractual obligations. According to the new paragraph 14.7 of article 271, clause 4 of the Russian Tax Code, for such incomes the recognition date is the date when they are credited to the bank account of a Russian organisation, but no later than 31 December 2029. The specified procedure applies to income received from a foreign organisation in whose respect the conditions set out in article 310, clause 2, paragraph 13 of the Russian Tax Code are met.

The Law also supplements article 271, clause 4 of the Russian Tax Code with new paragraphs 15 and 15.1 that clarify the income receipt date for income in the form of the sums of losses or damage payable, pursuant to an effective court ruling, to an organisation undergoing bankruptcy proceedings provided that the loss or damage was caused by the actions (omissions) of the persons controlling that organisation. Such income receipt date is the date of the actual arrival of funds (property).

Finally, the Law supplements article 272, clause 7 of the Russian Tax Code with a new paragraph 8.2, according to which the date of incurring expenses in the form of the reimbursement of losses or damages set out in new paragraphs 15 and 15.1 of article 271, clause 4 of the Russian Tax Code is the date of the transfer of funds (cash payments) or the date of the actual transfer of property.

8. Clarifications have been issued in relation to the procedure for determining the book value of shares of an economically significant organisation (“ESO”) held as assets by a foreign holding company. The Law introduces amendments to article 277, clause 2.6 of the Russian Tax Code pursuant to which an ESO may take a decision to determine the proportion of the book value of its shares in the assets of a foreign holding company whose corporate rights in relation to the ESO have been suspended by court, on the basis of an independent market evaluation. Such an evaluation must be carried out on the final day of the 150-day period since the court's decision to suspend the corporate rights of the foreign holding company in relation to the ESO.

9. The Law has extended the cap of no more than 50% on loss carry-forwards for previous periods. Article 283, clause 2.1 of the Russian Tax Code was amended accordingly. According to the amendments, the cap on loss carry-forwards of no more than 50% has been extended until 31 December 2030 (previously until 31 December 2026).

10. The amendments set out the procedure for calculating the proportion of expenses of an international holding company (“IHC”) for the purposes of applying preferential profits tax rates to such IHC. Relevant amendments have been introduced to article 284.10, clause 2, paragraph 3 of the Russian Tax Code according to which, when calculating the proportion of the IHC's expenditures for the acquisition of goods (work or services) within the Russian Federation in the total of the IHC's expenditures taken into account for the purposes of the IHC's compliance with the conditions for the application of reduced rates, expenditures for transactions involving securities are not taken into account.

11. The list of “qualifying” income for private funds has been expanded for the purposes of applying the preferential profits tax rate. The Law has amended article 284.12, clause 2, paragraph 6 of the Russian Tax Code pursuant to which income from private funds which is subject to a reduced tax rate now includes income from the trust management of unit investment trusts, i.e. interim distributions on units.

12. The Law revises the procedure for determining the amount of an investment tax deduction. According to article 286.1, clause 11 of the Russian Tax Code, constituent territories of the Russian Federation may introduce an investment deduction of no more than 100 percent of the costs specified by the law of the constituent territory of the Russian Federation.

An investment tax deduction applies to the tax (advance payment) calculated for the tax (accounting) period in which the specified expenditure was incurred, as well as for subsequent tax (accounting) periods.

13. The amendments abolish the requirement to file profits tax returns at the location of the taxpayer's separate subdivisions. Amendments have been introduced to article 289 of the Russian Tax Code to remove the obligation to file a tax return at the location of each separate subdivision.

This provision will enter into force on 1 January 2027.

Simplified Taxation System

1. According to the amendments, the list of expenses relating to the acquisition and creation of intangible assets (“IA”) has been expanded. The Law has amended article 346.16, clause 1, paragraph 2 of the Russian Tax Code to provide that taxpayers operating under the simplified taxation system may deduct expenses relating to the improvement, retrofitting, reconstruction, modernisation and technical upgrading of IA, in addition to other expenses incurred in acquiring such IA.

2. The Law has changed income thresholds for exempting taxpayers operating under the simplified taxation system from VAT. Amendments have been introduced to article 145 of the Russian Tax Code according to which for a taxpayer operating under the simplified taxation system to be exempt from VAT, their income must not exceed RUB20 mln for 2025 and RUB 15 mln for 2026, instead of the current threshold of RUB60 mln. In 2027 and subsequent years, this threshold will be reduced to RUB10 mln.

The relevant amendments have been revised since the initial draft of the law. The initial proposal was to lower the threshold from RUB60 mln to RUB10 mln with effect from 2026. However, after discussions with the business community, the Russian Government opted for a phased reduction in the income threshold for exempting taxpayers operating under the simplified taxation system from VAT.

3. The Law revises the rules governing the loss of a VAT exemption for taxpayers operating under the simplified taxation system. If, during a tax period for tax payable under the simplified taxation system, the total income of an organisation or sole trader exceeds RUB20 mln for 2026, RUB15 mln for 2027, and RUB10 mln roubles for 2028 and subsequent years, such organisation or sole trader shall, from the first day of the month following the month in which such an excess occurred, commence fulfilling the obligations of a VAT taxpayer.

4. The Law clarifies the procedure for applying reduced VAT rates for taxpayers operating under the simplified taxation system. Organisations or sole traders operating under the simplified taxation system that have switched to the 5% or 7% tax rate for the first time are entitled to opt out of applying the specified tax rate before the expiry of the established period (12 consecutive tax periods), provided that such opt-out is made within four consecutive tax periods, starting from the first tax period for which a tax return has been filed that reflects transactions subject to taxation at the specified tax rate.

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The Denuo team would be pleased to provide assistance in connection with the implementation of these and other new amendments in the context of the current business processes, including assessing tax risks, giving recommendations on business structuring and other matters.