Russia's 2027 tax reform: CFCs without exemption, fines and a scale up to 22%

In short

• The tax bill was submitted to the State Duma on 30 September 2026 as part of the budget package. The main rules apply from 1 January 2027, but no earlier than a month after publication.
• The CFC profit exemption up to RUB 10 million is abolished: tax will be due on all profit.
• The ownership control threshold rises from 25% to 50%. The fine for not filing a CFC notification rises from RUB 500,000 to RUB 754,000 per company.
• Dividends, deposit interest, income from property and securities sales move to a scale from 13% to 22%.
• Non-residents will pay 30% on Russian interest and dividends instead of 15%. Personal fund income tax rises from 15% to 22%.
• This is a bill. Figures may change at second reading.

What the bill is

It is the tax part of the 2027-2029 budget package. The document amends Parts One and Two of the Tax Code, the calculation of personal income tax and profit tax, the CFC rules and almost all fixed fines. Budget laws are usually passed before year end, but the second reading often changes details: rates, thresholds, dates.

The timing works like this. Changes to personal income tax and profit tax take effect a month after publication, but not before the start of a new tax period. If the law is published by the end of November, that means 1 January 2027. The CFC rules in the bill are tied directly to 1 January 2027.

What this means for you. Plan decisions that depend on these changes for 2027 now, but check the final figures against the adopted text. We will update this article once the law is passed.

CFCs: the end of the RUB 10 million exemption

The RUB 10 million threshold was introduced as a temporary measure so foreign company owners could adapt to the new rules. The bill's explanatory note says so directly: the threshold was transitional. In the finance ministry's view, the adaptation is over. The Tax Code provision on this threshold ceases to apply from 1 January 2027.

For our Cypriot company owner this means the following. Profit of RUB 3.5 million that was previously untaxed will enter his tax base from 2027. CFC profit is taxed together with other income, so the rate will depend on the total. That is tax of several hundred thousand roubles a year for a structure that used to cost only accounting and notifications.

The second change is the control threshold. As a general rule a controlling person will be one who owns more than 50% rather than 25%. Minority holders in joint structures with foreigners will leave the CFC regime. But the second criterion remains: a stake above 10% if Russian residents together hold more than half. Sole control under the charter or the personal law of a foreign structure is treated as 100% participation: a formal stake no longer protects you if one person actually runs the structure.

The third is an extension of a special regime. If restrictive measures prevent a CFC from paying dividends, special rules may be used when calculating profit. This regime is extended for 2026-2030, subject to documentary evidence.

What this means for you. If you have a small foreign company with profit under RUB 10 million, from 2027 it will start generating tax. You have until year end to decide whether you need it in its current form.

Three typical situations

A specialist who left, with a deposit in Russia. He has lived in Belgrade for two years and has become a tax non-resident. He holds RUB 10 million in a Russian bank at 14% a year, which is RUB 1.4 million in interest. Today the tax is 15%, RUB 210,000. Under the bill it is 30%, RUB 420,000. A difference of RUB 210,000 a year appears without any action on his part.

A family with large deposits living in Russia. Interest on RUB 40-50 million at current rates easily yields several million roubles a year. Part of it will fall into the 18% and 20% bands. Here the question is not where to hold the money but how to spread income between family members and years without breaking the rules.

An owner of several foreign companies. For him the main threat is not rates but fines. One forgotten CFC notification in 2027 costs RUB 754,000; three companies cost more than two million. These are the clients we start inventories with.

What this means for you. The same reform hits different people differently. Calculate your own situation, not the market average.

Fines are rising, and not only for CFCs

The bill indexes almost all fixed fines in Part One of the Tax Code for accumulated inflation. For foreign structures the increases are significant. Percentage fines for non-payment of tax stay the same, but their minimum amounts rise.

Note that the fine for not filing a notification is charged per company and per foreign entity. An owner of three foreign structures who forgot about notifications risks more than two million roubles for a single year. If notifications for past years have not been filed, file them now while the old amounts apply.

What this means for you. CFC notifications and notifications of participation in foreign entities are becoming an expensive mistake. Check that every year has been filed.

Passive income: a scale up to 22%

Today dividends, deposit interest, securities income and property sale income of tax residents are taxed at 13% and 15%. The bill moves this income to the general five-band scale. Special rules for forming the bases remain: dividends are not mechanically added to salary and have their own set of bases, but the same progression applies to it.

The change also affects deposits. From 2027 banks will withhold tax on interest as tax agents, and the tax-free allowance will be calculated using the maximum key rate of the previous year. The final amount under the scale will be calculated by the tax service after year end.

Example: RUB 30 million in dividends

Take the owner of a Russian LLC who has long postponed paying dividends. Profit has accumulated, and RUB 30 million can be paid out. Let us calculate the tax on payment in 2026 and in 2027 under the bill, assuming no other income in this base.

The difference is RUB 950,000, about 21% on top of the current tax. The larger the passive income, the larger the gap: above RUB 50 million the rate is 22% instead of 15%. For income up to RUB 5 million nothing changes.

Hence an obvious thought: if the dividend decision is made anyway, paying before 31 December 2026 costs less. But it only works if the company has distributable profit, corporate decisions are properly documented and the payout does not hurt the business. Doing it "just in case" is not worth it. Since 2026 a payment on a participant's exit from an LLC is also taxed as dividends, so an exit as an alternative must be calculated too.

What this means for you. The new scale barely touches income below RUB 5 million a year and hits large capital noticeably. If you receive tens of millions in dividends or interest, run your numbers before year end.

Non-residents: 30% on Russian income

For tax non-residents the preferential 15% rate on Russian bank interest and Russian company dividends is abolished: such income will be taxed at 30%. Dividends to type C accounts are proposed to be taxed at 35%. This matters for those who have already left and continue to receive income from Russia.

Many changes only concern tax residents: CFCs, the progressive scale, notifications of foreign accounts. A tax resident is someone who spent at least 183 days in Russia in 12 consecutive months. But changing residence is not an "off switch" for taxes. A non-resident pays 30% on Russian income, loses deductions, and can only change status by genuinely living abroad and proving it. We covered the basics in our pieces on tax residence and the 183-day rule.

Personal funds and closed-end funds

Personal fund income tax rises from 15% to 22%, the top rate of the general scale. If a personal fund was set up mainly for tax benefits, its point is much reduced. If it was set up for succession and asset protection, it remains a working tool.

From 1 January 2027 closed-end and interval mutual funds for qualified investors become profit tax payers at 15%, withheld by the management company. Unit holders will be able to offset this tax against their personal income tax on fund payouts, but the offset may not fully cover the additional burden.

What does not change: account notifications

Many confuse tax fines with currency control fines. Notifications of foreign accounts and reports on account movements are governed by the currency regulation law, and fines for them are set by the Code of Administrative Offences. The bill does not touch them. We covered the filing procedure in our guide to notifying the Russian tax service of a foreign account.

The bill does, however, affect banks directly: the fine for a bank that fails to report the opening or closing of a client's account rises from RUB 40,000 to RUB 132,000. Banks will become even more careful with reporting, which means information about your accounts will reach the tax service faster.

Automatic exchange of information

The bill also raises fines related to automatic exchange of financial information. Financial institutions that fail to report or to establish a client's tax residence will pay 40-70% more. Clients too: an individual who provides incomplete or false information about themselves will pay RUB 14,000 instead of RUB 10,000.

The takeaway is simple. If a bank or broker asks you to confirm your tax residence, answer accurately and on time. A mistake on the form now costs more, and the information will reach the tax service anyway.

Abolishing the RUB 10 million exemption is the most sensitive change for our clients. Dozens of small foreign companies existed only thanks to that threshold. I would not wait for the law to pass: calculate the tax under the new rules now and decide the fate of the structure while there is time for a calm restructuring.

Dmitry NagyInternational Tax Consultant, BRIDGES

Reporting calendar for 2027

The new fines make deadlines more important than before. Here are the main dates for an owner of foreign assets, which the bill does not change. The 3-NDFL return including CFC profit is filed by 30 April of the year after the year in which income is recognised. The CFC notification is due by 20 March of the same year. The report on foreign account movements is due by 1 June. A notification of opening or closing a foreign account is due within a month.

The most common mistake is thinking that if there is no tax, there is no need to report. That is how owners of CFCs with profit under RUB 10 million lived: they filed notifications and paid no tax. From 2027 that difference disappears too, so it is worth keeping a calendar for each structure separately.

What to do before 2027

On timing we suggest a simple order to clients. By the end of 2026: inventory and missed notifications. Right after the law is passed: calculation under the new rules and a decision on each structure. Restructuring, if needed, is best completed during 2027, the first year of the new rules.

Summary

The 2027 tax bill makes foreign structures and large passive income more expensive, and reporting mistakes much more expensive. The RUB 10 million CFC exemption goes, fines rise, interest and dividends are taxed on a scale up to 22%, and non-residents pay 30% on Russian income. It is still a bill, but the main rules are planned from 1 January 2027, leaving less than three months for calm preparation.

How this article was prepared

The budget package tax bill amending Parts One and Two of the Tax Code as submitted to the State Duma on 30 September 2026, and its explanatory note. Current rules: Tax Code of the Russian Federation, rules on CFCs, personal income tax and fines. Currency control fines: Code of Administrative Offences. Prepared by Dmitry Nagy, International Tax Consultant at BRIDGES. All facts were checked on 11 October 2026. The bill may change during review.

Related: notifying the tax service of a foreign account, tax residence, the 183-day rule.