Mishustin: VAT payment threshold for small and medium businesses will be gradually reduced

The Russian government has taken into account proposals on changes to the tax system, particularly in the simplified tax system (STS) for small and medium businesses, and the patent system. Prime Minister of Russia, Mikhail Mishustin, announced this, as reported by TASS. The government suggests gradual changes to the VAT payment thresholds: up to 20 million rubles in 2026, 15 million rubles in 2027, and 10 million rubles in 2028. Mishustin stated that authorities may impose a moratorium on holding SMEs accountable for their first violations in VAT payment. ‘Considering the government’s authority to mitigate risks for taxpayers who violate VAT payment for the first time under the new norms, a moratorium on accountability may be established,’ Mishustin explained during the government meeting. The authorities have also considered maintaining a favorable regime for IT VAT and ensuring incentives for the development of domestic software.