Russia: Banks could withhold income tax on deposit interest automatically from 2027

Russia's State Duma passed a bill in first reading on 29 October that would change how income from bank deposits is taxed. If the document clears all stages, from 2027 credit institutions would independently calculate and withhold personal income tax (NDFL) when paying interest. Currently, the Federal Tax Service (FNS) determines the annual tax, and citizens pay it after receiving a notice.

Under the Finance Ministry's plan, the tax rate would depend on the size of a person's total income rather than its source. Deposit interest would be added to salary and other receipts and taxed on a five-step scale from 13% to 22%. When withholding, banks would account for the non-taxable threshold and calculate the amount cumulatively from the start of the year. The non-taxable amount would be set based on the highest Central Bank key rate in the previous year.

The bill must pass the remaining readings before the changes can take effect. The next consideration is scheduled for 19 November.