From 2025 Russia's corporate income tax rose from 20% to 25% — the first increase in over a decade. What matters for your company is the effective rate after the reliefs that still apply.
The headline CIT rate went from 20% to 25% from 1 January 2025, with the federal portion rising the most. It's the base rate for most companies now.
Check which reduced rates still apply to you — IT companies keep a 5% rate, and SEZ and regional regimes cut it further — and model CIT together with withholding on repatriation, not separately.
Russia's corporate income tax (CIT) — known as налог на прибыль — has been 20% since 2009. That changed on 1 January 2025: Federal Law No. 176-FZ raised the standard rate to 25%, the first increase in 16 years. For international groups with Russian subsidiaries, this is a material change to the cost of doing business in Russia — and to the economics of profit repatriation.
This guide covers the new rate structure, who is affected, what exemptions and reduced rates remain, how the change interacts with transfer pricing and double tax treaties, and what practical steps CFOs and tax directors should take now.
The increase is structurally a federal increase only: the federal portion of CIT rises from 3% to 8%, while the regional portion stays at 17%. This matters because regional authorities retain their ability to reduce the regional portion — but only the regional 17%, not the new federal 8%.
Corporate income tax rose from 20% to 25% from 1 January 2025 — the first increase in over a decade, falling mainly on the federal portion. It's the base rate for most companies now.
The 25% rate applies to all taxpayers subject to Russian CIT on the standard regime:
Russian LLCs (ООО) and joint stock companies (АО) — regardless of foreign ownership
Foreign companies operating through a permanent establishment in Russia
Foreign companies receiving certain types of Russian-source income subject to withholding tax at corporate rates
Russian-controlled foreign companies (CFCs) where profit is attributed to a Russian tax resident parent — see our article on CFC reporting
The 25% rate does not apply to companies on the simplified tax regime (УСН), patent system, or other special regimes — though those regimes have their own rate changes in 2025.
IT companies keep a 5% rate; SEZ residents and certain regional regimes go lower. The gap between 5% and 25% makes confirming your eligibility worth the effort.
The rate increase is not universal. Several categories retain reduced or zero rates:
Pick your situation — we'll tell you where you stand:
The IT sector benefit deserves particular attention for international groups. Russia has maintained an exceptionally low CIT rate for accredited IT companies — 5% since 2022, previously 3% — and this was preserved (and slightly increased from 3%) under the 2025 reform. For IT businesses operating in Russia, this remains a significant advantage.
Be accredited by the Ministry of Digital Development as an IT company
Derive at least 70% of total revenue from qualifying IT activities (software development, implementation, support, testing, database services)
Have at least 7 employees (no minimum headcount for small companies)
A Russian LLC owned by a foreign parent can qualify for the 5% IT rate, provided it meets the accreditation and revenue tests independently. The foreign ownership structure does not disqualify the Russian entity. Many international IT groups have restructured their Russian subsidiary activities to maximise IT revenue as a proportion of total turnover — though this requires genuine substance and is subject to scrutiny under transfer pricing rules if the subsidiary also provides non-IT services to the parent.
The regional portion of CIT (17%) remains available for reduction by regional authorities. This is unchanged by the 2025 reform. Several regions actively use this tool to attract investment:
Moscow and Moscow Oblast: Standard 17% regional rate applies. No general reduction currently available outside SEZ.
Kaluga Oblast: Historically offered reduced rates for certain industries — check current position with regional authority.
Russian Far East (Vladivostok Free Port, PSEDA): Combined federal and regional rate as low as 2–5% for qualifying investors.
Republic of Tatarstan, Lipetsk SEZ: Reduced rates for SEZ residents in specific sectors.
Regional benefits require formal investment agreements and compliance with minimum investment and employment thresholds. They are most relevant for greenfield manufacturing and logistics investments rather than service operations.
The CIT base is calculated as revenue minus deductible expenses. The Russian approach broadly follows IFRS principles but with important differences:
Deductible expenses must be economically justified, documented, and incurred to generate taxable income. The FTS scrutinises intercompany expenses (management fees, royalties, interest) particularly closely — see our article on transfer pricing in Russia.
Depreciation uses Russian tax depreciation rules (not accounting depreciation). Accelerated depreciation is available for certain categories of equipment.
Loss carryforward is permitted but capped at 50% of the current year tax base per year. Losses can be carried forward indefinitely — but the 50% annual cap means large losses take time to utilise.
Interest deductibility on loans from related parties is restricted by thin capitalisation rules (3:1 debt-to-equity for most related-party debt). Excess interest is non-deductible and reclassified as a dividend subject to 15% WHT.
25% from 1 January 2025, up from 20% — the standard rate for most companies. The increase falls mainly on the federal portion of the tax. Reduced rates survive for specific cases: IT companies, special economic zone residents and certain regional regimes.
Yes — the preferential 5% CIT rate for accredited IT companies was preserved through the reform rather than raised with the standard rate. Confirming your accreditation and that your revenue mix qualifies is worth doing, because the gap between 5% and 25% is substantial.
It compounds with withholding tax. Profit is taxed at 25% inside Russia, then dividends out face withholding — 15% for suspended-treaty countries, lower where a treaty is active. Modelling the two together shows the real cost of getting profit home, which is higher than either number alone suggests.
This guide explains the new 25% rate. Your question is more practical: what does the jump from 20% actually add to your Russian tax bill this year — and are you using every reduced rate and exemption you're entitled to before you pay it?
Filing season approaching? The reduced rates you qualify for are worth confirming before the return, not after.
Practical support for international business in Russia.