Taxation of interest income on accounts and deposits opened with banks

Starting from 2023, personal income tax (hereinafter referred to as Personal Income Tax (PIT), tax) shall apply to income in the form of interest on deposits (account balances) if it exceeds the amount of interest calculated as the product of one million rubles and the maximum key rate of the Central Bank of the Russian Federation in effect as of the 1st day of each month in the specified tax period (calendar year).   

Exception:

- interest paid on escrow accounts and on deposits (account balances) in rubles, for which the interest rate during the calendar year did not exceed 1% per annum;

- income in the form of interest received in 2021 and 2022 on deposits (account balances) with banks located in the territory of the Russian Federation.

Interest received by individuals on foreign currency deposits (accounts) shall be taken into account regardless of the interest rate and converted into rubles at the official exchange rate of the Bank of Russia on the date of actual receipt of such income.   

When determining the amount of interest for 2023 not subject to taxation, for 2023 the Federal Tax Service will use the maximum key rate of 15%.

In 2023, income in the form of interest on deposits (accounts) with banks in the amount of 150,000 rubles (RUB 1 million × 15%) is not subject to Personal Income Tax (PIT).

The determination of the tax base and calculation of tax in respect of income in the form of interest shall be carried out by the tax authorities on the basis of data provided by banks, the Central Bank of the Russian Federation, or the state corporation "Deposit Insurance Agency (DIA)".   

Interest income on deposits and accounts is included in the aggregate of tax bases subject to Personal Income Tax (PIT) at the progressive tax rate of 13% / 15% (for example, wages, income from securities transactions, and other income established by Clause 2.1, Article 210 of the Tax Code of the Russian Federation). If the amount of tax bases is less than or equal to 5 million rubles, the Personal Income Tax (PIT) rate will be 13%. A rate of 15% will apply to the amount exceeding 5 million rubles.

The tax shall be paid annually no later than December 1 of the year following the reporting year.  For income received for 2023, the tax in respect of income in the form of interest on deposits (accounts) shall be paid no later than December 2, 2024.

The tax shall be paid on the basis of a tax payment notice sent by the tax authority. Thus, interest on deposits is paid by the bank in full without withholding tax. The amount of income received on accounts is reflected in the taxpayer's personal account.

The tax notice will be sent to depositors in September-October 2024 for 2023.