9 min
Methodologist BDO Unicon Outsourcing
Amount of living wage in 2021
From 2021, living wage is set for a whole year, not for a quarter, as it was before.
Previously, the value of the living wage was based on calculating the cost of goods included in the market basket, whereas now it depends on the median per capita income in the country.
Starting 1 January 2021, the living wage is:
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per capita — RUB 11,653;
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for working-age population – RUB 12,702;
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for pensioners – RUB 10,022;
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for children – RUB 11,303.
The per capita living wage in Moscow for 2021 is RUB 18,029 ().
The per capita living wage in St. Petersburg for 2021 is RUB 11,910.40 ().
Resolution of the Government of the Russian Federation No. 2406 dated 31 December 2020
Key rate of the Bank of Russia
In 2021, the Board of the Bank of Russia raised the key rate. Previously, the Central Bank maintained it at 4.25 %. The rate has been raised for the first time since late 2018. Starting 12 June 2021, the key rate of the Central Bank of the Russian Federation is 5.50 % per annum.
The key rate is used to calculate compensation for late payment of wages and penalties on personal income tax and insurance premiums.
If the rate changed during the period of delay, then different key rate values should be used for the calculation.
Increased personal income tax rate of 15 %
Starting 1 January 2021, the personal income tax rate has been increased from 13 to 15 percent for those with an income of over RUB 5 million a year.
Not all income is taxed with the increased rate, it only applies to the income portion in excess of RUB 5 million.
Income within this limit is taxed at a rate of 13 percent.
Personal income tax at a rate of 15 percent must be paid to a special Budget Classification Code (KBK) 182 1 01 02 080 01 0000 110.
Personal income tax on dividends
In 2021, when paying dividends to individuals, Russian organizations who act as tax agents should respect two amendments that were introduced to Chapter 23 of the Tax Code by Law No. 8-FZ dated 17 February 2021.
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Taxable dividend income was separated from other tax bases. Now, when calculating the total amount of income subject to personal income tax at 13 or 15 percent rates, taxable dividend income must be determined separately. Until the amount of income included in this tax base exceeds RUB 5 million cumulatively since the beginning of the year, a tax agent must withhold personal income tax at a rate of 13 percent. Even if it pays the individual other incomes named in Subparagraphs 2–9, Para. 2.1, Article 210 of the Tax Code, along with these incomes.
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A new procedure has been established for offsetting income tax against personal income tax withheld from dividends. Starting 1 January 2021, paid income tax can be offset against the payment of personal income tax on dividends received by individuals from this organization.
Personal income tax on interest income
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From 2021, personal income tax will apply to interest on deposits and bank account balances in excess of non-taxable interest income.
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Non-taxable interest income is equal to the product of 1 million rubles and the key rate of the Bank of Russia set as of January 1 of the corresponding year.
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Tax authorities will calculate the tax at a rate of 13 percent themselves. They will do it using information reported by banks. The tax office will send the taxpayer a notice indicating the amount of tax payable.
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This procedure will apply to income received starting from 1 January 2021. The first deadline for paying tax on such interest under the new rules is 1 December 2022.
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Taxpayers must wait for a notification from the tax office, and then transfer personal income tax in a general manner no later than December 1 of the year following the reporting tax period. Such income is not required to be disclosed in the 3-NDFL tax return.
Federal Law No. 102-FZ dated 01 April 2020 (Cl. 2, 4)
Income exempt from personal income tax
Starting 1 January 2021, the list of non-taxable income categories has been specified (Article 217 of the Tax Code).
1. Leave travel allowance
The provisions on exemption from personal income tax for leave travel allowance, including baggage, for workers from the Far North have been brought into line with the rates of contributions. If the leave takes place abroad, the exemption from personal income tax will apply to the cost calculated to the border checkpoint, including an international airport (Papa. 10, Cl. 1, Art. 217 of the Tax Code). Before 1 January 2021, such payments were subject to personal income tax.
2. Resort fee compensation
The exemption from personal income tax applies to a resort fee compensation paid to an employee travelling on business (Para. 12, Cl. 1, Art. 217 of the Tax Code).
3. Guardianship allowance
The exemption from personal income tax applies to an allowance of up to RUB 50,000 which is paid by an employer upon birth or adoption of a child. Since 2021, it also includes guardianship (Para. 7, Cl. 8, Art. 217 of the Tax Code).
Reduction of insurance contributions for welfare payments
Insurance premiums can no longer be reduced by mandatory insurance costs, with Clause 2, Article 431 of the Tax Code being invalid from 1 January 2021.
Employers no longer pay benefits, which are then reimbursed by the Social Insurance Fund, payments now go directly from the Social Insurance Fund (Article 6 of Law No. 478-FZ dated 29 December 2020).
Direct benefit payouts
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From 2021, all regions will be subject to the rules of direct payments, which were previously provided for the Social Insurance Fund’s pilot project.
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From July 2021, maternity and child benefits may only be transferred to Mir cards.
Employers no longer pay benefits. The exception is the allowance for the first three days of an employee’s illness, the funeral allowance, as well as the payment of additional days off for caring for a disabled child.
The fund will reimburse the company’s expenses for additional days off for caring for disabled children and the funeral allowance according to a general procedure, but they cannot be offset against contributions. An application to the Social Insurance Fund is required for reimbursement.
Size of benefits
Starting 1 February 2021, child benefits have been increased by a factor of 1.049. The indexation was approved by
1. Early pregnancy registration welfare — RUB 708.23 (RUB 675.15 x 1.049)
2. Maternity and delivery welfare (for 140 days) — 100% of the average daily earnings for two years preceding the year of the maternity and delivery leave. The maximum size of the 140 days’ welfare will be RUB 340,795.00.
3. One-time childbirth welfare — RUB 18,886.32 (RUB 18,004.12 x 1.049)
4. Monthly childcare welfare (for children under 1.5 y.o.) — calculated by multiplying the average daily earnings (calculated by dividing the earnings accrued for the calculation period by the number of calendar days of that period, except calendar days not included in the calculation) by 30.4
Minimum threshold: RUB 7,082.85 (RUB 6 752.00 x 1.049)
Maximum threshold: RUB 29,600.44 (865,000 + 912,000)/730 * 30.4 * 40%)
The temporary procedure for calculating sick leaves has become permanent
In 2021, the temporary disability allowance for the first three days is calculated based on the living wage, if an amount below the living wage results from the employee’s actual earnings per month.
The formula for calculating the benefit considering the regional coefficient is as follows:
Benefit based on the living wage = Federal living wage in 2021 RUB 12,792 / Total number of calendar days in a month of disability 31, 30 or 28 x Number of days of disability in a given month paid by the employer 1, 2 or 3 x District coefficient
This procedure was first established by Federal Law No. 104-FZ dated 01 April 2020 to take effect from 1 April 2020. Starting 1 January 2021, the temporary procedure became permanent. Changes were made to Article 14 of Federal Law No. 255-FZ dated 29 December 2006.
Cancellation of applications for the payment of benefits from the Social Insurance Fund
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One no longer needs to fill out an application for every payment of benefits from the Social Insurance Fund.
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For an employee to receive benefits from the Social Insurance Fund, they need to fill in the “Information About the Insured Person”.
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An application in a unified form as required by Order No. 578 of the Social Insurance Fund dated 24 November 2017 will not have to be drawn up for each insured event. This document has officially ceased to be valid.
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The standard application for maternity leave or childcare leave is still in force for the purpose of personnel records (Articles 255 and 256 of the Labour Code). This is a written confirmation of an employee’s intention to take leave and the basis for granting it and issuing an order.
New details in tax payments
Starting 01 May 2021, new details are used for tax payments. The changes affected four fields:
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Field 13 — Name of the beneficiary bank. It is still the Federal Treasury, but its name has become longer.
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Field 14 — BIC. It is now different in all constituent entities of the Russian Federation.
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Field 14 — Beneficiary’s account number. Previously, this field was left blank, now it must be filled in.
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Field 17 — Treasury account number. This is a completely new attribute. It starts with 031.
Therefore, the new rules require two accounts to be indicated in payment orders, not one.
Orders of the Federal Treasury No. 15n dated 01 April 2020, and
The Federal Tax Service changed the rules of reconciliation with the budget
Starting May 1, taxes and charges should only be transferred according to new payment details. If you made a mistake in a tax payment order, settlements should be reconciled with the budget under the new temporary rules. The previous procedure, also a temporary one, has become invalid.
The new procedure will remain in effect until the order “On Approval of the Procedure for Joint Reconciliation of Settlements for Taxes, Charges, Insurance Contributions, Penalties, Fines, and Interest, and the Procedure for Submitting a Statement of Joint Reconciliation of Settlements for Taxes, Charges, Insurance Contributions, Penalties, Fines, and Interest in Electronic Form, as Well as the Form and Format of the Statement of Joint Reconciliation of Settlements for Taxes, Charges, Insurance Contributions, Penalties, Fines, and Interest, and the Form and Format of the Application for a Statement of Joint Reconciliation of Settlements for Taxes, Charges, Insurance Contributions, Penalties, Fines, and Interest”. Its draft has been pending approval since autumn.
The tax authorities have adjusted the list of cases which require mandatory reconciliation. Earlier, reconciliation of settlements by tax authorities was mandatory in the following cases:
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on a quarterly basis with major taxpayers;
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on the initiative of taxpayers – pursuant to their application;
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in other cases established by the legislation on taxes and levies.
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Major taxpayers no longer need to reconcile their settlements every quarter.
A company application remains the basis for reconciliation. The Federal Tax Service recommended the form of this document in its Letter No. AB-4-19/17644 dated 28 October 2020. A statement of reconciliation will be ready within five business days.
