Putin Extends Law on Self-Employment Taxes in 19 New Regions

President of Russia, Vladimir Putin signed a law that introduces from January 1, 2020 a tax on self-employed in 19 donor regions and regions with cities with over one million people. The document was posted on Sunday on the official portal of legal information, TASS reported.

The law extends the territory of the experiment to establish a special tax regime (professional income tax) from four to 23 Russian regions.

Currently, the self-employed tax is valid only in Moscow, the Moscow Region, Kaluga Region and Tatarstan. It provides that citizens who provide paid services without hiring employees must pay 4% of their income to the budget when working with individuals and 6% when working with companies.

As the authors of the document noted, the monitoring conducted by the Federal Tax Service showed that the features of this tax regime – a simplified registration procedure, exemption from the use of cash registers, the absence of any reporting to government bodies and comfortable tax rates – were demanded by taxpayers, previously not paying taxes.

From January 1, 2020, taxpayers registered in St. Petersburg, Voronezh, Volgograd, Leningrad, Nizhny Novgorod, Novosibirsk, Omsk, Rostov, Samara, Sakhalin, Sverdlovsk, Tyumen, Chelyabinsk regions, Krasnoyarsk and Perm regions, Nenets can apply the special tax regime Autonomous Okrug, Khanty-Mansi Autonomous Okrug, Yamalo-Nenets Autonomous Okrug, Republic of Bashkortostan.

The document was approved by the Russian Federation Council on December 11.