Russians who work remotely, both from abroad and in the Russian Federation, must have a “remote work” provision in their employment contracts, otherwise the flat personal income tax rate of 13–15% will not apply. This was announced on January 1 by Linda Kurkulite, a lawyer from the international tax planning practice BGP Litigation, in an interview with “RIA News”.
She emphasized that remote workers should pay attention to the details of taxation between Russia and the country from which they work.
“If such income should be taxed not only in the Russian Federation, but also in the country of tax residence (in most countries the principle of taxation of all global income of tax residents works), it is necessary to clarify in accordance with the tax legislation of this jurisdiction about the possibility of offsetting the tax paid in the Russian Federation, against tax payable in the foreign jurisdiction of the employee’s tax residence,” Kurkulite said.
The expert recalled that Russia has suspended a number of provisions of tax treaties with unfriendly countries. However, she noted that clauses that allow tax paid abroad to be credited remain.
Kurkulite indicated that similar tax agreements were terminated with a number of states. According to her, a person working remotely will be a resident of these jurisdictions. In his case, it will not be possible to avoid double taxation, the expert added.
In July 2023, Russian President Vladimir Putin signed a decree introducing a single personal income tax rate of 13–15% for Russians who work remotely both from abroad and from Russia. The innovation concerns employees of Russian companies who work remotely both under employment contracts and under civil law contracts (GPC). As noted in the document, for most cases the tax rate will be 13%, and 15% is provided for income over 5 million rubles per year.
The decree came into force in 2024. As specified in the document signed by the head of state, new rules will come into force for freelancers in 2025.
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