Expatriate tax ebook - Russia

Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Sample income tax calculation

Pre arrival procedures
Employers are entitled to attract foreign labour force and foreign employees only upon receipt of appropriate individual work permit as well as confirmation of the right to handle labour activities issued for the company by state authorities. Highly qualified personnel (with annual remuneration exceeding RUR 2 000 000) may enjoy simplified procedure.

Employment visas
Expatriates granted with work visas will not be required to apply for residence visas. However, each member of an expatriate's family who accompanies him to Russia must apply for a residence visa.

Tax year
The tax year in Russia runs from 1 January to 31 December.

Tax returns and compliance
Most Russian and expatriate employees working in Russia pay their tax through payroll withholding and are not required to file a tax return. However, certain categories of individuals are obliged to file Personal Income Tax returns. These individuals are:

• Individual entrepreneurs;
• Persons with any types of income without tax withholding;
• Persons with income from foreign sources;
• Persons with income from sale of property.
  

The personal tax return should be filed by 30 April following the end of the tax year concerned.

In addition foreign nationals are obliged to file tax returns one month prior to intended departure from Russia provided they are not planning to come back to Russia in the same tax period.

Income tax rates - tax resident
Personal Income Tax
Currently a system of flat rates is applied for the purpose of taxation of individuals’ income. The basic rate is equal to 13%.

Some types of income are subject to other tax rates. Thus, for example, income received in the form of dividends is subject to a 9% rate. The tax shall be calculated, withheld and paid by the source of income.

Some specific types of income including, but not limited to, deposit interest in excess of certain rates, grants, prizes, and interest savings are subject to the individual income tax at the rate of 35%.

Personal Income Tax Rates

Income obtained by non-resident individuals is subject to the rate of 30 per cent.

Income of the highly qualified specialists is subject to the rate of 13 per cent. This rate is applicable from the first day of arriving to the RF territory. The highly qualified specialists are defined as employees with annual salary exceeding RUR 2,000,000.

When determining taxable base tax residents may apply standard tax deductions, property tax deductions, social tax deductions and professional tax deductions.

Sample income tax calculation - 2010

Information about Russia: