Russian President Vladimir Putin signed a bill into law on taxation of self-employed citizens which stipulates imposition of a trial tax in four regions, TASS agency reports.
The tax experiment will begin on January 1, 2019, in the economically developed regions of the country, including Moscow, the Moscow Region, Tatarstan and the Kaluga Region. It is expected that the unique experiment will last for ten years, until the end of 2028. However, experts believe that by that time it may transform and affect other Russian regions as well. Currently, the income tax for the self-employed stands at 4% (on providing services to individuals) and 6% (on providing services to companies). However, later the tax may be raised to almost 10%.
Currently, tax payers benefit from the rate compared to the regular tax regime that requires paying the income tax of 13% and VAT (18%, to be raised to 20% starting January 1, 2019). Self-employed tax payers will also be eligible for a minimal social retirement pay. In order to increase the amount of their future pensions, they can make additional voluntary contributions to the compulsory pension insurance system.
It will be impossible to become self-employed for those involved in the following types of activity: selling goods subject to excise duty, re-selling goods and property rights, producing and selling mineral resources, entrepreneurship in the interests of a third party.
Additionally, the monthly income of the self-employed people must not exceed RUR 200,000.