Do you sell goods through social media, offer fitness training, or sew clothing to order? The key question is: do you need to pay taxes? Yes — otherwise a hobby becomes an unlicensed commercial activity. Since 2019, the Russian government has introduced a convenient mechanism to address this.
What Is Self-Employment
Prior to January 1, 2019, the concept of “self-employed citizen” (samozanyaty grazhdanin) was effectively absent from Russian legislation. As of that date, four regions officially introduced a new tax regime — the professional income tax (nalog na professionalny dokhod, NPD): Moscow, Moscow Oblast, Kaluga Oblast, and Tatarstan. The regime was subsequently extended to all of Russia.
A self-employed person is an individual who:
- works without registering as a sole proprietor (IP)
- does not employ any staff
- earns annual income of no more than 2,400,000 rubles
- registers online — through the My Tax (Moy Nalog) application or a bank
How Self-Employment Differs from a Sole Proprietorship
| Parameter | Self-Employed | Sole Proprietor (IP) |
|---|---|---|
| Employees | Not permitted | Permitted |
| Tax reporting | Not required (except NDFL return) | Required |
| Cash register | Not required | Depends on tax regime |
| Income ceiling | 2,400,000 ₽/year | None |
| Pension and health fund contributions | Optional | Mandatory |
| Tax rate | 4% (individuals) / 6% (legal entities) | Depends on tax regime |
Permitted Types of Activity
Federal Law No. 401-FZ (2016) expanded the list of self-employed income categories exempt from tax. These include:
- Care and assistance for children, the ill, and the elderly
- Private tutoring
- Residential cleaning and household services
- other categories established by regional authorities
Regional governments may add to this list. In Chelyabinsk Oblast, for example, self-employed individuals may obtain a tax patent for a single type of activity for up to 12 months.
How to Register
Registration is entirely online — through the Federal Tax Service (FNS) application My Tax (Moy Nalog) or through an authorized bank. No visits to the tax office are required. All income is recorded through a bank account.
Limitations and Risks
- Resale of third-party goods is not permitted — only the results of one’s own work
- Agency arrangements on behalf of third parties are not permitted
- Exceeding the 2.4 million ₽ annual income ceiling triggers automatic transition to the standard tax regime
- The status is relatively new: the legislative framework continues to evolve and changes remain possible
Uncertain whether self-employed status is right for you, or whether a sole proprietorship is preferable? Tell us about your situation — we will help you choose the optimal structure and avoid tax risks.