Changes in payroll calculation in 2021-Publication

Progressive PIT Rate

The increased personal income tax rate of 15% will apply to periodic and active income over RUB 5 mln (for example, salary and dividends). Occasional income will not be subject to the rate of 15% (proceeds from the sale of any personal property of citizens (except for securities) and insurance payouts).

The new progressive PIT rate will apply separately to each tax base.

If a tax agent makes a mistake in calculating the tax at the combined rate (RUB 650,000 plus 15% of the excessive income over RUB 5 mln), no penalties or interest will be charged for the first quarter of 2021. Currently, the fine for each calculation with false information amounts to RUB 500.

In this case, the tax agent shall transfer the outstanding amounts to the budget on its own until 01 July 2021.

Federal Law No. 372-FZ dated 23 November 2020

Maximum Amount of the Base for Insurance Premiums

Maximum Amount has increased for:

Social Insurance Fund in case of temporary disability and due to maternity — from RUB 912,000 to RUB 966,000;
Pension Fund of the Russian Federation — from RUB 1,292,000 to RUB 1,465,000;

Insurance premium rates for the main categories of payers:

Pension Fund of the Russian Federation — 22% (10% above the maximum amount of the base);
Social Insurance Fund — 2.9% (1.8% of the remuneration to foreign nationals temporarily residing in Russia);
Federal Compulsory Medical Insurance Fund — 5.1%.

Decree of the Russian Government No. 1935 dated 26 November 2020 On the Maximum Amount of the Base for Insurance Premiums for Compulsory Social Insurance in Case of Temporary Disability and Due to Maternity and for Compulsory Pension Insurance from 01 January 2021

Insurance Premiums Payable by IT Companies in 2021

From 2021, the rate of insurance premiums for IT companies will be reduced to 7.6%:

compulsory social insurance – 6.0%
temporary disability and maternity – 1.5%
compulsory medical insurance – 0.1%

All conditions for application of the exemption remain, with two new restrictions added:

the company should receive 90% of income from the sale and maintenance of proprietary software only;
the software must not be intended for advertising or provide access to advertising, find buyers or sellers, and close deals.

Tax Code, Clause 5, Article 427. Reduced rates for insurance premiums

Amount of Living Wage in 2021

The living wage for the working-age population of the Russian Federation in general has been increased for 2021. The amount is set at RUB 12,392.

The living wage for 2021 in Moscow has been increased (Resolution of Moscow City Government No. 1351-ПП dated 25 August 2020) to amount to RUB 20,361 for the working-age population.

The living wage for 2021 in Saint Petersburg has been increased (Resolution of Saint Petersburg City Government No. 687 dated 9 September 2020) to amount to RUB 12,796.90 for the working-age population.

According to the law, the value of the living wage affects the value of the minimum statutory wage.

From 1 January 2021, the MSW value may amount to RUB 12,392 (the value of the living wage for the working-age population for Quarter II of 2020). This follows from Article 1 of Law No. 82-FZ dated 19 June 2000.

Order of the Russian Ministry of Labour and Social Protection No. 542н dated 28 August 2020

New Procedure for Issuing and Filling Out Sick Leave Forms

A sick leave form may be filled out both in printed and electronic form.

The procedure for issuing sick leave forms approved by Order of the Russian Ministry of Health No. 925н defines the rules for issuing and filling out sick leave forms in printed form and in the form of an electronic document.

This procedure also updates the list of cases when individuals are entitled to sick leave.

A sick leave form may now be issued in the name of:

leaders of business entities who are sole members;
persons sentenced to imprisonment and involved in paid work.

Documents required to fill out an electronic sick leave form:

personal identification document;
individual insurance account number (SNILS).

The initial sick leave form may be issued in printed form and continued in the form of an electronic document.

The electronic sick leave form will be the same even for employees holding a second job.

The order removes the provision which limits the number of childcare sick leave days for children aged 7 to 15 years old.

Sick leave (including prenatal and maternity leave) does not necessarily require a personal visit to the doctor.

An error in filling out an electronic sick leave form must be corrected, with the sick leave form to be re-submitted to the Social Insurance Fund.

Procedure for issuing sick leave forms approved by Order of the Russian Ministry of Health No. 925н dated 01 September 2020

Bank Account Details of the Federal Treasury for Tax Payments

From 1 January 2021, there will be changes in the bank account details of the Federal Treasury for tax payments.

Information about the new treasury accounts is published in Letter of the Russian Federal Tax Service No. КЧ-4-8/16504@ dated 8 October 2020.

When filling out a payment order, special attention should be paid to filling out Field 17 “Beneficiary Account Number”, and indicating the bank account (correspondent account) becomes mandatory – its value will be indicated in Field 15 “Beneficiary’s Bank Account Number” of the payment order.

The Treasury of Russia has set a transitional period from 1 January to 30 April 2021, when both old and new accounts will function simultaneously.

From 1 May 2021, only new treasury accounts will be valid.

Letter of the Russian Federal Tax Service No. КЧ-4-8/16504@ dated 8 October 2020

CHANGES EXPECTED IN 2021

Change of Personal Income Tax Codes

Codes 1400, 2400 will be removed from the current list of income types and the following new ones will be added:

1401 – Rental income (housing)
1402 – Rental income (other property)
1500 – Income from transactions with securities as per Para. 3, Clause 1, Article 226 of the Tax Code of the Russian Federation
2004 – Payments to teachers for class supervision
2017 – per diem over RUB 700 for each day of business travelling in the Russian Federation and over RUB 2,500 for each day of business travelling abroad
2763 – allowances for students
3011 – lottery winnings

Draft Order of the Russian Federal Tax Service On Amendments to Appendices No. 1 and No. 2 to Order of the Russian Federal Tax Service No. ММВ-7-11/387@ dated 10 September 2015 On Approval of Codes for Types of Income and Deductions

Rates and Payment Procedure for Insurance Against Accidents at Work and Occupational Diseases for the Period of 2021–2023

For the period 2021–2023, it is proposed to keep the current rates and payment procedure for insurance against accidents at work and occupational diseases.

According to Draft Federal Law No. 1027747-7, premiums for insurance against accidents at work and occupational diseases will be paid in accordance with Federal Law No. 179-FZ dated 22 December 2005 On the Rates of Compulsory Social Insurance Against Accidents at Work and Occupational Diseases for 2006 (a total of 32 insurance rates are applicable depending on economic activities by classes of professional risk).

To stimulate the inclusion of persons with disabilities in the labour process, the draft law maintains the existing preferential rates (at 60% of the set value) for individual entrepreneurs in respect of payments to employees who belong to disability groups I, II and III.

Draft Federal Law No. 1027747-7 On the Rates of Compulsory Social Insurance Against Accidents at Work and Occupational Diseases for 2021, including Projections for 2022 and 2023