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Delovaya Rossiya has submitted more than 50 economic proposals to Russian authorities, including plans to end or narrow several tax regimes used by small businesses and sole proprietors. The proposals are under review, and no decision to adopt them has been announced.
Delovaya Rossiya, one of Russia’s largest business associations, has proposed ending or restricting several tax breaks used by small businesses and sole proprietors, according to RBC. The proposals include eliminating two simplified tax options from 2027, imposing a common value-added-tax threshold across special tax regimes and abolishing the patent tax system; authorities have not announced whether they will adopt them.
The association has sent the government more than 50 economic proposals, many of which would change tax arrangements commonly used by smaller firms. It wants to remove the “income” option under Russia’s simplified tax system, known as USN, and the automated simplified tax system, or AvtoUSN, as early as 2027. Under the current income-based options, businesses pay tax on total revenue at rates of 6% under USN and 8% under AvtoUSN.
Delovaya Rossiya also proposes requiring businesses on all special tax regimes to pay VAT once annual revenue exceeds 20 million rubles, based on the previous calendar year. AvtoUSN currently allows businesses to avoid VAT up to a 60 million ruble threshold. The group further wants to prevent regional governments from setting lower USN rates and to abolish the patent tax system, under which sole proprietors pay a fixed amount calculated from assumed income.
Other proposals include charging social insurance contributions to people whose income mainly comes from interest and dividends, and taxing gifts and inheritances. Shares in publicly traded companies would be exempt from the proposed gift and inheritance taxes. The package has been sent to relevant government agencies for review. A Finance Ministry representative told RBC that the ideas “require further comprehensive study.”
Potential Costs for Small Firms
The proposals could increase costs for businesses that currently rely on simplified calculations, fixed patent payments or regional tax reductions. Yevgeniya Memruk, head of the Union of Accountants and Tax Consultants, told RBC that the income-based options are used by smaller firms with high profit margins and revenues of 10 million to 20 million rubles. Their income, she said, often depends heavily on the owner’s work and expertise rather than large operating expenses.
Memruk warned that moving these firms to other regimes could leave them with a tax base at least two and a half times larger, potentially making some businesses unprofitable and prompting closures. That is a warning about the possible effect, not a confirmed outcome. A shared VAT threshold could also reduce the tax advantage that has drawn businesses to AvtoUSN, while removing regional rate-setting powers could weaken incentives offered by regions seeking to attract investment.
The issue reaches a broad population of taxpayers. Nearly 3.5 million entrepreneurs still use USN, while nearly 1.5 million use the patent system, according to the source report. The proposals’ final reach would depend on which measures, if any, the government chooses to advance.
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How the Tax Options Work
Under USN, regional governments can currently reduce the 6% rate on income to as low as 1%. For the “income minus expenses” option, regions can cut the rate from 15% to as low as 5%. Delovaya Rossiya’s proposal would remove that discretion. The group argues that special regimes can be abused by businesses that split operations artificially or misrepresent their status to lower tax bills.
The patent system gives sole proprietors a fixed tax charge based on income the state assumes they will earn. Its eligibility threshold is already being reduced: it was set at 20 million rubles in 2026 and is scheduled to fall to 10 million by 2028. The proposal would go further by eliminating the system. Memruk told RBC that trucking, independent retail, and personal and household services would be among the sectors affected; she also said abolition would reduce regional budget revenues.
AvtoUSN has recently attracted more users as the VAT threshold for businesses using regular USN was lowered. Sberbank said early this year that the number of its individual entrepreneur and corporate clients using AvtoUSN had risen sixfold in one month. The report attributes that change to the threshold shift, but does not give a baseline client count.
““Companies posing as small businesses” distort market competition.”
— Alexey Repik, Delovaya Rossiya chairman
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No Government Decision Yet
The proposals remain recommendations, not adopted policy. The Finance Ministry has said they require further study, and the source report says it is not known whether the government will accept any of them. It is also unclear whether officials would take up the package as a whole or consider individual measures separately.
Memruk’s warnings describe possible consequences if the changes are enacted; they are not evidence that businesses have already closed because of these proposals. The source material also does not specify the final wording, implementation details or any transition arrangements that might accompany a law.
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Review and October Forum
Delovaya Rossiya’s reform program is due to be presented at the association’s forum on October 15, which President Vladimir Putin is also expected to attend, according to the source report. The proposals have been sent to relevant government agencies, and the Finance Ministry has already considered them at an initial stage, while saying more study is needed.
The next substantive development would be an official government position or legislation setting out which measures might proceed and on what timetable. Until then, the suggested 2027 start dates are part of the association’s proposal, not confirmed implementation dates.
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Key Questions
Has Russia approved the proposed tax changes?
No. Delovaya Rossiya has submitted proposals for government review, and the Finance Ministry said they require further study.
Which small-business tax systems could change?
The package proposes removing the income-based options under USN and AvtoUSN, setting a common VAT threshold across special regimes, limiting regional tax-rate reductions and abolishing the patent system.
When would the proposed changes take effect?
Some measures, including changes to the income-based USN and AvtoUSN options and the proposed common VAT threshold, are suggested for 2027. Those dates are not confirmed government deadlines.
Why does Delovaya Rossiya support the proposals?
The association says businesses can abuse special tax regimes by splitting operations or misrepresenting their status to reduce taxes. Its chairman, Alexey Repik, said companies posing as small businesses distort competition.
What happens next?
The association’s program is due to be presented at a forum on October 15. Government agencies, including the Finance Ministry, will need to assess the proposals; no adoption decision has been announced.
Source: rss
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