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Should you start worrying about your Russian income tax return?

06/02/2014

If, irrespective of nationality, you are a Russian tax resident or a Russian tax non-resident who received Russian-sourced income last year then you may have to submit a personal income tax return this year.

Are you a tax resident in Russia?

You become a Russian tax resident as soon as you stay in Russia for at least 183 calendar days in any 12 month rolling period. For the 2013 tax filing, you also need to have retained the tax residency status as at 31 December 2013.

Do you need to file a tax return?

In practice, the filing requirement applies only if tax has not been withheld at source on the following types of income:

Who

Types of income

Russian tax residents (whether foreign expatriates

or Russian nationals)

Worldwide income

Russian tax non-residents (whether foreign expatriates

or Russian nationals)

Russian-sourced income

Tax rates

On most types of income, resident taxpayers are subject to Russian personal income tax on their worldwide income at the general flat rate of 13%. Different tax rates apply to non-employment-related income (such as dividends, prizes from advertising competitions, etc.).

Non-resident taxpayers are subject to Russian personal income tax on their Russian-sourced income at the general flat rate of 30% with certain exceptions (e.g. dividends paid to non-residents are taxed at a 15% tax rate), unless a more beneficial tax regime is provided by the applicable Double Taxation Treaty.

If you are a foreigner and hold a highly qualified specialist work permit, you enjoy special tax treatment. Your income from professional/employment activity in Russia is taxed at the 13% tax rate even if you are not a Russian tax resident. Any other type of income is, however, taxable at the 30% tax rate until you meet the Russian tax residency requirements.

When is the filing deadline?

The personal income tax return for income received in 2013 has to be submitted by 30 April 2014.

Any tax due must be paid by 15 July 2014.

Foreign individuals who leave Russia permanently must submit a tax return 30 days before their departure. Any tax due must be paid 15 days prior to the departure.

Source
CMS Client Alert | February 2014 | Tax
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Authors

Safaryan Hayk
Hayk Safaryan
Partner
Moscow
Igor Ershov