The State Duma submitted a bill to increase the tax for workers from abroad
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The government has submitted a bill to the State Duma, according to which Russian companies in some cases will have to levy 30% of personal income tax on payments in favor of workers who have left abroad. Document published in the Duma electronic database.
It is specified that employers or customers will charge personal income tax from contractors or employees at a base rate of 13-15%. And after the loss of tax residency, personal income tax payments will be increased to 30%.
The bill is expected to enter into force on January 1, 2024, if passed. The change will affect those Russians who, when working abroad, use the domestic segment of the Russian Internet or hardware, software and hardware that were placed in Russia.
The deputy head of the United Russia faction in the State Duma, a member of the Labor Committee, Andrey Isaev, told Vedomosti earlier today that he had not yet read the text of the bill, but from a retelling of the media [ему] it is clear that if the project is adopted, the current tax regime for Russians who have ceased to be tax residents of the Russian Federation will also apply to those working under a civil law contract.
Later in the press service of the Ministry of Finance reportedthat the changes will not affect those who work abroad in the Russian segment of the Internet under an employment contract. The Ministry of Finance drew attention to the fact that the bill is still at the stage of finalization at the site of the government of the Russian Federation. Press Secretary of the President of the Russian Federation Dmitry Peskov also stressed that the government continues “expert process” on this initiative.
If labor functions are performed without the use of domain names and network addresses located in the Russian Federation, but, for example, through foreign addresses, then the innovations of the bill will not be applicable, since the conditions for applying the norm will not be observed, says Linda Kurkulyte, lawyer at BGP Litigation’s international tax planning practice. . The new law will make the previously acceptable practice of working with remote employees impossible.
According to the explanations of the Ministry of Finance, previously it was allowed to fix the address of work performed abroad in an employment contract and, as a result, income was recognized as received abroad. If the bill is passed, the provision on a foreign address will not help, since the “binding” will be to Russian information systems and all income will be recognized as received and subject to taxation in the Russian Federation, the lawyer says.
At the moment, the legislation obliges tax agents, when making payments in favor of their employees, to check their status of tax residence on the date of payment of income, says Kurkulyte. However, employers do not have any external mechanisms to verify the information received from an employee – companies can only rely on information from employees. Liability for a tax agent for unlawful non-withholding of tax is a fine of 20% of the amount to be withheld and transferred.
“This approach has been discussed both in the Ministry of Labor and lawyers over the past year. Moreover, lawyers have already begun to describe these risks for their clients, since they already exist in the law, and the proposed changes are aimed at tightening the responsibility of the employer,” says Mikhail German, a lawyer in labor law. [Налоговый] the regime will not work in relation to persons who have left for the Republic of Belarus, since in this case the agreement on the Union State is in force, he specified.
“The question is whether this will be accompanied by some further steps on formal or informal restrictions and work bans for citizens who have left. Or until everything remains at such a compromise level,” notes political scientist Mikhail Vinogradov.
In early December 2022, Andrey Klishas, head of the Federation Council Committee on Constitutional Legislation and State Building admittedthat the authorities can develop measures that “make being abroad less comfortable” for Russians who have left since the beginning of partial mobilization. He said that amendments could be made that would limit the work of citizens who are abroad for Russian companies.
December 25, 2022 Chairman of the State Duma of the Russian Federation Vyacheslav Volodin urged cancel preferences for those who left the Russian Federation and introduce an increased tax rate for them.
In early February, Interfax wrote that the Ministry of Finance refused from the idea of changing the rules for taxing the income of citizens who have left, whom Russian companies have officially transferred to a remote mode of work. At the same time, the department insists on the need in some cases to levy 30% personal income tax on the salary of remote workers abroad.
Earlier, the head of the Ministry of Digital Development Maksut Shadayev, commenting on the mass departure of IT specialists from Russia, spoke against “draconian measures” against IT workers. According to him, it is necessary to create conditions for specialists to want to return to Russia. Shadayev said that the Ministry of Digital Development is already developing a program for the return of IT specialists to Russia. We are talking about discussing “guarantees” for workers so that they understand that “they have nothing to fear” in Russia. At the same time, at the end of November, the minister said that the departure of IT specialists from the Russian Federation did not significantly affect the industry in the country.
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