Policy Changes Russia from 1 January 2024

Policy Changes in Russia from 1 January 2024 What to Expect

New Year, New Rules: Policy Changes in Russia from 1 January 2024

As the clock strikes midnight on 1 January 2024, several policy changes will come into effect in Russia, impacting various aspects of citizens’ lives. From tax system updates to changes for remote workers, new holidays, and more, here’s what you need to know.

Changes in the Tax System

From 1 January 2024, Russia’s tax system will undergo significant changes. Two personal income tax notices will need to be provided on a regular basis, with specific deadlines for submission and payment. Consequently, employers must submit a notification in respect of personal income tax withheld from the 1st to the 22nd day of the current month by the 25th day, and pay the tax by the 28th of the month. Additionally, a report on personal income tax withheld from the 23rd day to the last day of the previous month must be submitted by the 3rd day of the following month, with tax payment due by the 5th of the month.

Impact on Remote Workers

Remote workers with employment contracts listing their workplace outside Russia will have their income treated as Russian-sourced. Consequently, tax on income of remote employees abroad will calculate at 13% standard rate. However, if income exceeds 5 million yearly, the rate increases to 15%.

This policy change significantly impacts the tax system for remote Russian workers living abroad. Their income now qualifies as Russian-sourced, subject to Russian taxation. Employers must withhold appropriate taxes based on the 13% or 15% rates. Remote employees need to review their tax situation carefully under these new rules.

Holidays According to the Production Calendar 2024

Meanwhile, Russians can look forward to extended holidays in 2024. Firstly, they will enjoy a 3-day break on 23 February. Additionally, International Women’s Day will be celebrated with a 3-day break on 8 March. Furthermore, the “May Holidays” will last 8 days, from 28 April to 1 May, and from 9 to 12 May. Moreover, Russians will celebrate Russia Day on 12 June with a day off. Finally, they will enjoy a holiday from 3 to 4 November in honour of the Day of National Unity, and the New Year holidays will start on 29 December.

Maternity Capital and Driving License Updates

From January 1, 2024, maternity capital will only pay for children born with Russian citizenship. Additionally, driving licenses issued in other countries will become invalid, except for Belarusian citizens with Russian residence permits.

These policy changes do not directly impact the tax system. However, they may affect eligibility for certain tax benefits or deductions related to childbirth and transportation expenses. Citizens and residents should review the updated regulations carefully to understand any potential tax implications.

Increase in Minimum Wage and Sick Leave Benefits

The minimum wage will rise 18.5% from January 1, 2024. This exceeds the 2023 inflation rate. As a result, wages will change across the country, especially for low-wage workers. Approximately 2.5% of minimum wage earners will get a pay raise starting January 1.

Chairman Vyacheslav Volodin stated President Vladimir Putin ordered this 18.5% minimum wage hike from January 1, 2024. Moreover, sick leave compensation will calculate as a percentage of two years’ average salary. The rate varies by length of service.

This policy impacts the tax system by increasing taxable income for affected workers. Employers must adjust payroll withholding accordingly. The government aims to boost low-income earnings through this minimum wage increase.

First Mortgage Installment

Finally, from 1 January 2024, the minimum down payment on mortgages will be 30% to avoid surcharges on mortgages granted to citizens with a debt load of 60% or less.

In conclusion, these policy changes in Russia from 1 January 2024 will have a significant impact on citizens’ lives. Stay informed to ensure a smooth transition into the new year.

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