New Set Of Tax Laws For 2022

• Published date: 06 February 2022
• Subject Matter: Tax, Income Tax, Capital Gains Tax, Sales Taxes: VAT, GST, Tax Authorities
• Law Firm: Eurofast
• Author: Ms Elena Korovina

In attempt to relaunch the economy after the COVID crisis, the government has made amendments to the laws aimed at accelerating economic development. The following proposed changes to tax legislation are expected to enter into force in January 2022.

On May 5, 2021, the government approved proposals for three laws:

Amendments to the Personal Income Tax Act

With the proposal of the Act on Amendments to the Personal Income Tax Act, the government wishes to help the economy by relieving taxpayers.

1. Raising general relief

By gradually increasing the general relief, the tax burden on income from work will be reduced. The general tax relief for all taxpayers is expected to gradually increase from the current '3,500 to '7,500 by 2025.

According to the proposed changes, the general tax relief would increase to '4,500 next year. This means that recipients of minimum wages could expect an increase of '160 in their net wages this year. Similarly, those receiving average wages could expect net annual wages to increase by '260.

2. Tax reduction for high income earners

The proposal also brings changes in the levels of the personal income tax scale. The biggest change is expected in the highest tax bracket, where the tax rate is expected to be 5% points lower; thus falling from the current 50% to 45%.

3. Introduction of senior relief

The amendment to ZDoh-2(Personal Income Tax Act) sets the ground for the reintroduction of senior relief, namely a reduction of the annual tax base in the amount of ' 1,500 per year will be applicable for tax residents after reaching the age of 70.

4. Capital gains tax

Tax profits will no longer be taxed after 15 years. In addition, the tax rate on interest, dividends, and capital gains is reduced from 27.5% to 25%.

The rental income rate is also changing, falling to 15%. However, the level of standard costs recognized in determining the tax base of rental income is also reduced from 15% to 10%.

Changes in corporate income tax

1. Modification of grant facilities

The tax credit for grants is being increased from the current 0.3% of taxable income to 1%.

2. New relief for green and digital transition investments

Entrepreneurs who are willing to invest in cloud computing, artificial intelligence, environmentally friendly technologies, cleaner, cheaper and healthier public and private transport, decarbonization of the energy sector, energy efficiency of buildings, introduction of other...