On 20 November 2025, the State Duma approved Draft Law No. 1026190-8 “On Amendments to Parts One and Two of the Tax Code of the Russian Federation, Certain Legislative Acts of the Russian Federation, and on Repealing Certain Legislative Acts (Individual Provisions of Legislative Acts) of the Russian Federation” (the “Draft Law”) at its third reading.
Vasiliy Ermolin (Partner) and Elena Khatetovskaya (Counsel), Ermolina & Partners, have prepared a brief overview of the key elements of the upcoming tax reform that may apply to IT companies in 2026.
Increase of the Standard VAT Rate
Beginning in 2026, the standard VAT rate will increase from 20% to 22%.
VAT Exemption for the Transfer of Exclusive Rights to Software and Databases
IT companies, which typically do not have input VAT available for deduction, will continue to avoid charging VAT on software sales in 2026. Under current legislation (sub-para. 26, para. 2, Art. 149 of the RF Tax Code), VAT is not charged on the transfer (including transfer for one’s own needs), assignment, or provision of exclusive rights to software and databases included in the Register of Russian Software. The Draft Law initially proposed eliminating this exemption; however, by the time of the third reading, that proposal was abandoned. Accordingly, the VAT exemption for IT companies remains in place.
VAT Threshold for Companies Using the Simplified Tax System (STS/УСН)
The current revenue threshold of RUB 60 million for STS taxpayers for triggering VAT obligations will be adjusted. The thresholds will be reduced in stages:
– RUB 20 million for 2025,
– RUB 15 million for 2026,
– RUB 10 million for 2027 and subsequent years.
This means that a company applying STS must begin charging VAT starting 1 January 2026 if its revenue for 2025 exceeds RUB 20 million.
Early Opt-Out from Reduced VAT Rates
Article 164(8) of the RF Tax Code currently allows taxpayers to opt out of reduced VAT rates of 5% (if cumulative revenue does not exceed RUB 250 million) and 7% (if cumulative revenue does not exceed RUB 450 million) only after three years of applying those rates.
An amendment to this provision will allow an STS taxpayer that has newly transitioned to the 5% or 7% VAT rate to opt out before the three-year period expires, provided the opt-out occurs within four consecutive tax periods beginning with the first tax period for which the tax return reflecting taxable operations at the reduced rate was filed.
Deductible Expenses for STS Taxpayers
Currently, the list of deductible expenses for organizations under STS is exhaustive. An amendment to Article 346.16 of the RF Tax Code will supplement the list with a new sub-para. 45, allowing taxpayers to deduct additional expenses determined in accordance with Chapter 25 of the RF Tax Code.
Unified Maximum Base for Social Insurance Contributions
Government Resolution No. 1705 of 31 October 2025 establishes a unified maximum base for calculating social insurance contributions, effective 1 January 2026, set at RUB 2,979,000 on a cumulative (year-to-date) basis.
Social Insurance Contribution Rates
The reduced social-insurance contribution rate of 15% for compensation above the minimum wage (MROT) will, as of 1 January 2026, be available only to small and medium-sized enterprises whose primary business activities fall within categories designated by the Government of the Russian Federation. The MROT will be RUB 27,093 as of 1 January 2026.
However, IT companies will apply a 15% rate to compensation up to the maximum base (RUB 2,979,000) and a 7,6% rate to compensation exceeding that base.