The Ministry of Finance plans to empower banks with the powers of tax agents for personal income tax on deposits
The agency proposes to oblige credit organizations to independently charge and withhold tax on interest on deposits
Quick Look
- The Ministry of Finance of the Russian Federation plans to give banks the powers of tax agents for personal income tax in relation to interest on deposits from 2027.
- Now banks only transmit data to the tax office, which itself calculates the tax.
AI-generated summary
Why It Matters
Now banks transmit information about interest to tax authorities, who themselves calculate personal income tax for the previous year.
The Russian Ministry of Finance wants banks to charge and withhold from clients tax on income on deposits, this is stated in the “Main Directions of Budget, Tax and Tariff Policy for 2026 and for the Planning Period of 2027 and 2028.”
Among the tax policy measures, the document mentions “granting credit organizations the powers of tax agents for personal income tax in relation to interest on deposits.”
Now banks do not act as tax agents; they only provide tax authorities with information about all interest paid to clients. Based on this information, tax authorities themselves calculate personal income tax and issue taxpayers the entire amount of tax for the previous year along with property taxes.
If banks are vested with the powers of tax agents, they will be able to charge and withhold tax from taxpayers immediately upon payment of interest if their amount exceeds the non-taxable threshold.
Income tax in Russia is levied on the accrued interest, and not on the amount of the deposit itself. In this case, not all interest income is taxed, but only that part of it that exceeds the non-taxable limit. This limit is calculated as the product of 1 million rubles and the maximum value of the Bank of Russia key rate for the year.
So, last year the maximum key rate was 21%, so the maximum non-taxable amount of interest is 210 thousand rubles per year. This year, the maximum level of the key rate in the spring was 16%, then the Central Bank reduced it. Therefore, the tax-free amount of income for the current year is 160 thousand rubles.
Interest on deposits and account balances, the rate on which throughout the entire calendar year is no more than 1% per annum, as well as on escrow accounts, are not taken into account.
Income from deposits is currently taxed at a rate of 13% or 15%. But from 2027, the Ministry of Finance proposed to unify the progressive personal income tax scale for all incomes of citizens.
What to Watch
AI outlook — possibilities, not facts
Application of general personal income tax rates to deposit income from 2027
Likely · Within months
Open Questions
- How exactly will tax withholding by banks be technically implemented?
- Will the innovation affect the profitability of deposits?
