One of the measures related to the COVID-19 pandemic announced by President of the Russian Federation in his address to the nation made on March 25, 2020 is introduction of personal income tax in the form of interest on deposits and debt securities. This measure is introduced by Federal law dated April 1, 2020 No 102-FZ.
Income in the form of interest on deposits in the banks located within the territory of Russia received within a tax period, i.e. within a calendar year, exceeding the amount calculated as 1,000,000 rubles multiplied by the key rate of the Bank of Russia (applicable as of January 1 of the current tax period), shall be taxable at the rate of 13%.
When determining the tax base, the income received in the form of interest on deposits with annual interest rate not exceeding 1% within the whole tax period, as well as on escrow accounts, shall not be considered.
Example. Within 2021 a person had a deposit in bank A in the amount of 500,000 rubles with annual rate of 8%, in bank B in the amount of 10,000,000 rubles with annual rate of 7%, and in bank C in the amount of 5,000,000 rubles with annual rate of 1%. Let’s assume that the key rate of the Bank of Russia as of January 1, 2021 is 6%. The taxable amount will be determined as the amount of interest received by the person in 2021 exceeding 60,000 rubles, i.e. 1,000,000 multiplied by 6%. For the purposes of calculating the tax base, we shall exclude the interest on the deposit in bank C, because the interest rate there did not exceed 1%. If the person’s income on deposits in banks А and В in 2021 equals 740,000 rubles, the taxable amount will be 680,000 rubles, and the person will pay income tax in the amount of 88,400 rubles.
Also, income in the form of interest (coupon, discount) received on bonds of Russian entities has been excluded from the list of non-taxable income (See point 1 of Article 2 of Federal law No 102-FZ).
These amendments shall become effective on January 1, 2021 and be applicable to the income received from January 1, 2021 onward.