The Ministry of Finance does not plan to extend the deferral of payment for deposit income tax, according to reports from Izvestia. Russians will need to settle the corresponding tax by the end of 2023, effectively due by December 2024.
Clarifications from the ministry show that taxpayers were initially supposed to declare deposit income in 2022. However, because of the ongoing special operation and the imposition of Western sanctions, the government postponed the payments by two years.
The tax rate is set at 13 percent. The non taxable allowance is 1 million rubles multiplied by the maximum national key rate for the entire year 2023.
Market participants note that residents could avoid tax on amounts up to 75 thousand rubles if the key rate stands at 7.5 percent per annum.
As previously reported by the outlet socialbites.ca, deposit rates in Russian banks were expected to stay at 10 percent per annum through the end of 2022. The Central Bank reported that the population’s total bank deposits fell by 458 billion rubles in September, a 1.4 percent drop from August. This marked the largest month to month withdrawal since the onset of the special operation in February 2022. During that period, individual account and deposit balances had declined by 1.2 trillion rubles. In response to this outflow, banks continued to adjust by offering higher deposit rates in an effort to retain customers.
Experts note that the decision to defer was a reaction to broader economic stress. The government’s stance is that the tax collection framework will return to normal once the external environment stabilizes. In practical terms, this means citizens should prepare for the tax to be payable on deposit income for the year 2023, even as a portion of the liability remains subject to the rules announced earlier. The authorities emphasize careful planning for savings and investment decisions as the currency and rate landscape evolves, particularly for individuals who hold significant deposits across different banks. The shift in policy will require savers to monitor the evolving rate environment and any changes announced by the central financial authorities. The overall effect on consumer liquidity will depend on the interplay between interest payouts, tax obligations, and the cost of money in the broader market, a factor that banks have already begun to address by adjusting rates to attract and retain retail customers. In this context analysts recommend evaluating the real after tax yield on deposits after accounting for the tax and the current rate environment, rather than focusing solely on headline rates. Attribution: Ministry of Finance, Central Bank, and market analysis reports.