In the 2023 cycle, Russians faced a new tax on interest earned from deposits, a measure announced by the government and reported by Izvestia through the Ministry of Finance. The policy on deposit income tax first emerged in discussions led by President Vladimir Putin in March 2020. The president noted that many countries employ similar practices and suggested that the revenue from this tax could support those in need. The original plan slated revenue collection to begin in 2021, but in early 2022 the government paused the levy as a supportive step during the pandemic.
Officials clarified that the tax on interest income for 2023 would be collected through December 2024, with adjustments to the calculation rules. Previously, the rule was tied to the total income from deposits exceeding 1 million rubles, regardless of how many individual deposits existed. For example, a person with three deposits of 700 thousand, 150 thousand, and 320 thousand rubles could be taxed on the combined income if the total surpassed one million rubles, even if the net interest income was modest. In that scenario, a calculated 13% rate would apply to the total interest earned at year end.
Under the updated approach, the tax targets only the amount of income actually received, not the aggregate deposit balances. This means a depositor with less than 1 million rubles in total deposits could still owe the tax if their interest earnings exceed the threshold. A tax-free allowance is defined by the level of the Central Bank’s key rate. If the rate remains at or below 7.5% in 2023, the exclusion amount is set at 75 thousand rubles. Should the key rate rise, the portion of income protected from taxation increases accordingly.
To illustrate, if a Russian investor earned 106,000 rubles in interest in 2023, the tax payable would be 31,000 rubles after applying the 75,000 ruble exemption (106,000 minus 75,000), assuming the conditions hold. The tax treatment focuses on the income actually received during the year rather than the timing of deposits themselves. A deposit opened in January 2022 and earning interest at the end of January 2023 would trigger taxation on those earnings, even though the deposit was held for a longer period. Not only classic time deposits are considered, but also savings accounts, card-linked accounts, and other deposit-like products. Exclusions apply to escrow accounts and deposits with a yield not exceeding 1%.
Crucially, the new levy does not spare lower-income groups. Pensioners, disabled individuals, and families with many children face the same 13% rate on deposit income. The scope includes both ruble deposits and foreign currency deposits; foreign currency earnings are converted into rubles using the Central Bank’s rate on the day the interest is credited.
Banks have stated that individuals will not need to calculate the tax themselves. Financial institutions will report figures to the Federal Tax Service, which will perform the calculation. Banks will not disclose deposit balances; instead they will report only the interest income to the tax authorities. Later, the taxpayer can review the calculated tax amount in the Federal Tax Service’s online personal account, expected to appear in early 2024. [Source: Ministry of Finance communications]