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Russian Free Press

The Ministry of Finance wanted to collect more taxes from the departed Russians

July 26, 2022
in Daily News
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The Russian Ministry of Finance intends to update the rules for taxing salaries and remuneration of employees of Russian companies who do not live in Russia. If earlier such deductions were not considered payments within Russia and were not taxed, now the Ministry of Finance is fundamentally changing its approach: both residents and non-residents will have to pay taxes on these deductions, and the rate for the latter will be 30%.

“Remunerations paid by domestic employers to remote workers outside the country are classified as income from Russian sources,” the Ministry of Finance said in a statement.

At the moment, the taxation of salaries is determined by the place of work, and not by the place of payment of wages - receiving income from a Russian company abroad was not taxed in Russia. The Ministry wants to change this principle and deduct 13% from the income of residents, and already 30% from the income of non-residents. B1 company (before the war, the Russian office of Ernst & Young) confirmed the change in the principles of taxation in the event of the adoption of amendments by the Ministry of Finance.

The new rules may affect Russians who have left Russian territory but continue to work for Russian companies. According to the current legislation, citizens cease to be considered tax residents if they have spent less than 183 days in Russia over the past 12 months. The Federal Tax Service (FTS) counts these days in each calendar year, that is, it will not work to “dial” 4 months in 2021 and 2 months in 2022.

There are no exact statistics regarding citizens who left Russia, however, according to the results of the first quarter of 2022, almost 4 million people left Russia against the backdrop of the war with Ukraine. Statistics for the second quarter of the authorities have not yet been published.

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