On July 9, 2024, members of the Spravedlivaya Rossiya – Za Pravdu (A Fair Russia – For Truth) political party filed a proposal in the State Duma to amend Russian Federal Law 183-FZ “On Citizenship” of 28 April 2023. The amendments would allow a discriminatory tax regime to be applied against any Russian citizen by birth who also has one or more additional citizenships (excluding South Ossetia or Abkhazia, whose sovereignty is officially recognized by Russia, as well as Belarus) or a foreign residency permit.

The draft amendments also require newly naturalized Russian citizens to renounce their foreign citizenship within 6 months of becoming naturalized (or, according the draft’s authors, within 6 months of the law coming into force for those who became naturalized before the law takes effect, though this is not clearly reflected in the draft); failure to do so would result in their Russian citizenship being revoked.

In a separate companion bill, the authors of the proposal are also proposing changes to the Russian Tax Code which would introduce a new Article 251.1 to double tax rates for those Russian citizens who are subject to the discriminatory regime. This includes not only income tax but vehicle tax and property tax rates.

The proposed date for the amendments to take effect is 1 January 2026. The authors indicate that the amendments comply with all of Russia’s international obligations, including within the framework of the Eurasian Economic Union, with one exception: the treaty between Russia and Tajikistan recognizing dual citizenship of the two countries. If the proposed amendments are passed, this treaty will need to be denounced.

In 2015, the year of the most recent available official estimates, the Russian Federal Migration Service reckoned that approximately 6 million Russians have a second passport, and for 30% of them the second citizenship is of another member of the Commonwealth of Independent States (CIS). That figure is expected to have significantly risen since then, and could be closer to 10 million.

If the law passes, CLS expects that many Russians with a second citizenship will use the time before the discriminatory tax rates kick in to explore their options to liquidate or transfer assets and restructure their income in order to optimize their tax burden. Others affected by the law may decide to set up household in the country of their second citizenship. The legal situation of Russians with ties to foreign countries is dynamic. If you expect that you may be affected by these or other changes to laws, please contact a CLS expert.