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What will happen to deposits in 2023

How will the income tax on deposits be levied in 2023, why is everyone discussing irrevocable deposits and what will happen to the yield?


Tax on income on deposits in 2023: how will it be?


At the end of 2023, depositors will for the first time pay tax on interest income on deposits and accounts under the new rules. Amendments to the Tax Code defining a new procedure for taxing income on deposits and accounts came into force in 2021. But in March 2022, as a support for the population, the application of the norm was delayed: interest income on deposits in 2021 and 2022 was exempted from tax. Therefore, in fact, until January 1, 2023, the tax was not paid.


Now, on interest payments received in 2023 on deposits and accounts that exceed the tax-free amount, personal income tax will have to be paid.


    • The tax-free amount is calculated as the maximum value of the Central Bank’s key rate in 2023, multiplied by 1 million rubles. For example, if in 2023 the key rate of the Bank of Russia does not exceed 8.5% (which is in line with the regulator’s baseline forecast), then the tax-free amount will be 85,000 rubles. Income from deposits that exceed this amount will be taxed.


    • The tax rate depends on the person’s total income for the year. If the total income (including interest income on deposits and accounts) is less than 5 million rubles, the tax rate will be 13%. If a person earned more than 5 million rubles in a year, the tax rate will be 15%.


    • For 2022, you do not need to pay tax on income on deposits. And for 2023, the tax will have to be paid before December 1, 2024.


    • Income on foreign currency deposits will be converted into rubles at the rate of the Central Bank on the date of payment of interest.


    • The tax calculation will not take into account interest income on escrow accounts and on ruble deposits and accounts, the rate of which does not exceed 1% per annum.


    • Interest income is included in the tax base of the year when it was paid by the bank to the depositor. The addition of interest to the body of the deposit (capitalization) is also considered a payment. That is, if you opened a deposit with a monthly capitalization in 2022, but it expires in 2023, the tax will be calculated only on the amount of capitalized interest that the bank has paid since January 1, 2023.


    • Tax and non-taxable amount are calculated from income on all deposits and accounts in all banks.


    • Calculates the tax of the Federal Tax Service, banks provide the Federal Tax Service with information on income received from interest on deposits or tax calculation accounts.


    • The Federal Tax Service sends a tax notice to the depositor with the amount of tax payable in the personal account of the Federal Tax Service or by mail. A notification with the amount to be paid will come before October 31st.


    • The bank does not withhold tax, as it is not a tax agent. The investor pays the tax himself. The tax payment deadline for 2023 is until December 1, 2024. You do not need to file a tax return (as well as other documents).



What will happen to the return on investment?


In 2022, as usual, the rate of return on deposits followed the key rate of the Bank of Russia. The baseline forecast of the Central Bank for 2023 assumes that the key rate will be in the range of 6.5-8.5%. While maintaining or slightly changing the key rate, deposit rates (excluding seasonal offers of individual banks) will remain at the current level of 6.5-8.5%, depending on the term and conditions of the deposit.


Expobank offers a deposit “Cosy” up to 9% per annum. Read more about this and other savings products here.


The start of taxation itself will also not have an impact on the dynamics of deposit rates, since the amount of interest income of the majority of depositors, as a rule, does not exceed the tax-free amount.


According to the DIA for 9 months of 2022, 97% of individuals have account balances that do not exceed RUB 1 million. And the maximum amount of compensation established by law at 1.4 million rubles per depositor provides full insurance coverage for 98.5% of all depositors of operating banks.


What are irrevocable deposits, and should we expect them in 2023?


Irrevocable deposits do not imply the possibility of full or partial withdrawal of funds ahead of the time period established by the agreement. Currently, such products are not provided by law. According to the Civil Code, the bank is obliged to return the deposit at the first request of the client, although it can recalculate the interest paid in case of early withdrawal of funds.

However, in 2022, the Bank of Russia began to actively discuss various configurations of a new instrument for the market. On the agenda is the issue of full or increased insurance of irrevocable deposits, the conditions under which money can still be withdrawn ahead of schedule and other parameters. So far, there is no general opinion on this matter, so it is too early to talk about any specific legislative changes. But the State Duma noted that the mechanism for introducing irrevocable deposits would be discussed in 2023.

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