Tax In Russia

A Contractor's Guide to Taxes : 

One of the most consistently challenging aspects of contracting in Russia is complying with the country’s tax system. As well as paying tax in Russia, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income: 

If you’re working in Russia under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Russia for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Russia, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Russia through PAYE is left with the prospect doing everything themselves.

Do you know much about Russian Tax Law? Does Russia have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Russia can range from 13 to 30 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator: 

If you are a contractor and want a calculation on your tax and net retention in Russia, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax : 

Contractors in Russia are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Russian umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Russian taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Russian tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax: 

We work with numerous umbrella companies in Russia, many of whom are experts in tax and immigration laws. If you have any questions about tax in Russia, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Russian work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Russia but without the overhead of directly dealing with the Russian tax authorities. Get in touch with us today for some reliable advice on tax in Russia!

When Do You Need to Lodge Your Tax Return?: 
30 April
Tax Filing Deadline : 
30 April
Can you file it online? : 
Yes, https://www.gnivc.ru/software/
Currency: 
Russian Rouble (RUB)
Tax-free Threshold in: 
None
Grossed Income: 
Flat Rate
Tax Rate: 
13%
How long does it take to set up: 
11 days
How much does it cost: 
RUB5,700 – RUB6,500 (+ RUB200 per signature)
Is it easy? : 
Starting a Business Rank: 28/190 (Source: World Bank)
How to File Taxes in: 

Do you need to file taxes?

You are not required to file taxes if you only receive employment income, unless you intend to claim a refund for itemised deductions. Your employer is required to withhold and file taxes for you.

You can file taxes online or at your local tax office.

Filing Online

Step 1: Install a Tax Filing Program

Every year, the Russian tax authority provides taxpayers with a free tax filing program, on which forms 3-NDFL and 4-NDFL can be filled. You can find this program here.

Download and install the program for the relevant tax year on your computer

Step 2: Fill in the Relevant Sheets

Fill in the forms which correspond to the types of income you have received. Samples can be found here.

Forms are in Russian and it is recommended that you consult a translator.

Notes: 

Flat rates: Residents are taxed at a flat rate of 13% for all types of income (except for interest income and income derived from prizes and awards which are taxed at 35%). Non-residents are taxed at a flat rate of 30% for all types of income (except for dividend income which is taxed at 15%).

Highly Qualified Specialists (HQS): Employment income earned by non-resident individuals with HQS status is taxed at 13% (instead of 30%). A HQS is a foreign national with work experience, skills or accomplishments in a specific field who is employed in Russia and receives a monthly salary of RUB167,000 or more. 

Does the 183 day rule apply in: 

Yes

When do you become a tax resident in: 

You become a tax resident in Russia when:

  • You spend at least 183 days in Russia within the relevant calendar year.

Note: Both the day of arrival in Russia and day of departure from Russia should be considered as days spent in Russia.

Am I taxed on my global income in: 

Residents are taxed on their worldwide income. Non-residents are taxed on their Russia-sourced income only.

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