The expert declared the right of Russians who fled from the mobilization not to pay taxes

Why the requirements of the Tax Code will not affect all those who left after September 21

Last week, six months have passed since the announcement of partial mobilization in Russia. The date is significant in that, according to the legislation of our country, citizens who have spent 183 days abroad lose their tax resident status. This means that everyone who went abroad after September 21 and did not return to their homeland must now pay an increased income tax: not 13%, but all 30%. However, this does not threaten all Russians abroad.

Authorities pointed out last year that citizens who went abroad after September 21 could significantly lose income after six months. At the end of March, the topic began to be discussed again in social networks, due to the expiration of 183 days from the moment the partial mobilization was announced, after which those who were afraid of a possible draft began to leave Russia. By law, they must submit declarations with updated data by May 2, this can be done online through the taxpayer’s personal account.

About how many Russians we are talking about, we can only say approximately, based on the statistics of the border services. As Vladimir Kuznetsov, vice president of the Association of Lawyers for Registration, Liquidation, Bankruptcy and Legal Representation, noted, estimates of the number of those who left vary: from 450,000 to 900,000 people as of the end of February 2023. At the same time, the period for the loss of residency does not include, say, the period of being abroad for the purposes of treatment, the expert recalled.

These nuances are one of the main reasons why it is difficult to estimate the estimated size of the total tax payments of those who fled from the mobilization. The Federal Tax Service does not have centralized databases that allow recording the moment of loss of residence by a particular payer. In addition, not everyone left the country in the first week after the announcement of mobilization, some Russians emigrated abroad later. “The tax authorities do not publish data on payers in accordance with the legislation on the protection of personal data,” explained Timur Fatykhov, a lawyer for the Sovet group. “Information about who paid and how much of those who left in 2022 is not publicly available.”

The amount of withholding taxes really depends on the tax residency. “If a resident of the Russian Federation pays personal income tax in the amount of 13-15%, depending on the level of income, then a non-resident immediately pays 30%,” Sergei Gebel, general director of the law firm Gebel and Partners, continues the conversation. “Personal income tax at this rate is withheld from the salary of a person who left the country, but continues to work for a Russian employer.” If the tax agent, that is, the employer, for some reason could not do this, then the non-resident employee is obliged to pay additional tax on his own.

Failure to pay taxes will be fraught with various kinds of consequences, the most serious of which can be called tax liability, as well as a ban on leaving the Russian Federation in the event of a non-resident returning to his homeland with a debt of more than 30 thousand rubles. “When hiding the status of a tax non-resident in order to reduce the amount of tax, an individual risks not only additional tax, but also penalties of up to 40% of the amount of arrears and penalties,” warned Zhanna Supryaga, executive director of the Dvitex law firm.

However, it is erroneous to assume that the very fact of the loss of tax residency in Russia will automatically entail the taxation of a citizen’s income at a rate of 30%. As Sergei Solovykh, head of the Wealthy Clients Department at IC Fontvielle, emphasized, this is not always the case. The fact is that income received from sources in the Russian Federation is taxed at an increased rate. And with the definition of these sources – not everything is so simple. There is no doubt that income from the rental of real estate located in the territory of our country (or profit from the sale of property) will be taxed at a rate of 30% after the loss of residence.

But with the income from the activities of the worker, the situation is more vague. The latest clarifications from the Federal Tax Service and the Ministry of Finance allow us to conclude that if an employee actually performs his duties outside the Russian Federation, then the source of his income is outside the Russian Federation. And if so, then he has no obligation to pay income tax under Russian laws, just as there is no obligation to withhold personal income tax from the employer. So quite a lot of those who left do not have to pay any income taxes under Russian law at all, Solovykh argues.

True, this position has so far been settled only in the form of clarifications, but not at the level of legal norms. Explanations are a tricky thing. How each specific case will be interpreted by the tax service depends on many factors. Therefore, there are quite high risks of being sanctioned by the Federal Tax Service both for employers whose departed employees are registered under employment contracts, and for employees who perform duties under any type of contracts or without them at all, the expert summed up.