Homerussia ukraine newsThose who left Russia will be punished with a ruble. The...

Those who left Russia will be punished with a ruble. The Ministry of Finance proposed to take 30% of personal income tax from emigrants – The Moscow Times in Russian

The Ministry of Finance has published a draft of changes to the Tax Code, designed to help the budget, where a “hole” of 6 trillion rubles has formed for the next three years. One of the innovations concerns those who left the country. The Ministry of Finance proposes to take personal income tax at a rate of 30% from those who continue to work remotely at their previous jobs.

It sounds like this: “remunerations paid by domestic employers to remote workers outside the country are classified as income from Russian sources.” Why does this mean 30% tax?

“Remunerations paid by domestic employers to remote workers outside the country are classified as income from Russian sources,” such a proposal is included among the tax innovations of the Ministry of Finance. This essentially means taking personal income tax at a rate of 30% from those who left, but continue to work remotely at their previous job.

Those who spent more than 183 days outside Russia in a calendar year become tax non-residents. They pay personal income tax at a rate of 30% from the income received in Russia, and not 13 or 15%, like everyone else. But what is considered such income? The tax code refers to them:

🔷 dividends and interest from Russian organizations and separate divisions of foreign companies in Russia;

🔷 insurance payments;

🔷 income from copyrights, pensions, scholarships, etc.;

🔷 income received from leasing or other use of property, including vehicles located in Russia;

🔷 income from the sale of real estate and other property in Russia;

🔷 remuneration for the performance of labor or other duties, work performed, services rendered in Russia;

🔷 other income received as a result of carrying out activities in Russia.

There was a white spot here: where do those who work from abroad for a Russian company get their income? Abroad, lawyers interpreted, and the Ministry of Finance seemed to confirm their correctness. If the work of a non-resident of Russia is carried out outside Russia, even if the income is paid by a Russian company, it is not considered received from a Russian source and is not subject to personal income tax in Russia, VPost partner B1 (former EY) Anton Ionov said. The place where the work is performed is determined by the location of the employee, Mikhail Khaletsky, partner at NSP law firm, noted, this is, in general, a unified approach in international taxation, which is also followed by the OECD. The Ministry of Finance issued letters with such explanations several times., including this spring, reminded Dmitry Kostalgin, partner of Taxadvisor law firm. (For example, the Ministry of Finance classified income received from a Russian organization under an employment contract on remote work outside Russia as income from foreign sources in letters No. BS-4-11/9947 dated July 15, 2021 and 03-04-06/15 886 of March 4, 2022)

Now the Ministry of Finance wants to consider this income received in Russia.

What will they prove?

The Federal Tax Service can find out that a person has been abroad for more than 183 days through the border service. Today, the tax service does not automatically collect information about the presence of citizens abroad, but can request information about crossing the border by an individual in the border service.

The law does not oblige the taxpayer to report that he has become a non-resident. There is no liability for failure to report. But there is an obligation to declare income from which tax has not been withheld. If the tax office finds out that a person has become a tax non-resident and paid taxes as a resident, he may be charged additional personal income tax, penalties and fines.

After the war, according to various estimates, several hundred thousand people left Russia, many of whom work remotely. But how many of them continue to work for their former employer is difficult to estimate. But those who left the war and kept their jobs will have to pay extra to the budget of the country that unleashed this war. Tax residence is determined at the end of the year, and by that time the bill prepared by the Ministry of Finance is likely to be adopted.

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