Within the letter No. 03-04-06 / 39770 of the Tax and Customs Policy Department of the Ministry of Finance of Russia, as of June 23, 2017, the Ministry of Finance of Russia provided explanations on taxation aspects of foreign citizens.
Tax residents of Russia are individuals who actually stay in Russia for at least 183 days during the next 12 consecutive months. Remuneration for work, services provided, and actions outside Russia refers to incomes from sources outside Russia. When sending an employee on a business trip, he is guaranteed the average earnings, which is paid by the organization. These payments of average earnings are considered as income from the sources in Russia. The incomes of individuals who are not recognized as tax residents of Russia received from sources in Russia are subject to personal income tax at the rate of 30%.
If the employment contract provides for the employee's place of work in a foreign country, the employee's journey to perform employment duties in the place provided for in the employment contract will not require the execution of a business trip, and the remuneration for performing work duties outside Russia will be related to income from sources outside Russia. Revenues from sources outside Russia received by individuals who are not recognized as tax residents of Russia are not subject to tax on personal income in Russia.
At the same time, this letter is not mandatory for compliance and does not prohibit other interpretations of Russian legislation.
For additional information, please contact consultants of Confidence Group.
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