Russia Introduces Tax Breaks for Long-Term Savings and Non-State Pension Contributions
President Vladimir Putin has signed legislation expanding the tax benefits available to Russians who build long-term savings. The law introduces a personal income tax deduction on funds placed into long-term savings contracts, including contributions to non-state pension funds and individual investment accounts, starting in 2024. The change is intended to encourage greater retention of wealth within the country and to support private retirement planning. reports the signing of the law.
Under the new rules, the maximum deduction on personal income tax will not exceed 400 thousand rubles per calendar year. In addition to savings, the law covers pension contributions paid under non-state pension agreements, providing a tax incentive for individuals who participate in such private pension schemes. confirms the scope and the annual cap of the deduction.
Earlier, the State Duma approved the law in its second and third readings, paving the way for tax advantages aimed at people who commit funds to long-term savings. notes the legislative approval process and the intent behind the amendments.
The document outlines deductions for three types of financial activity: contributions under non-state pension agreements, long-term savings within non-state pension funds, and funds held in an individual investment account (IIA). These deductions apply to income generated from these accounts starting in 2024. The cap remains at 400 thousand rubles per year. details the scope and limits of the deduction.
To qualify for the deduction, several time-based conditions apply. A long-term savings contract must remain in force for at least 10 years. An IIA contract must be valid for at least 5 years, and its maturity is designed to lengthen from 1 year up to 10 years through the contract term. The rules also allow deductions for IIAs opened up to and including 2024. outlines the minimum hold periods and the phased maturity structure.
Earlier financial commentators advised Russians to consider opening a deposit as part of planning for future savings. The new legislation strengthens the rationale for proactive savings decisions and private pension participation as a complement to state pension provisions. analysts referenced by TASS discuss advisory perspectives surrounding the law.