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21 May, 2023 05:30

Russia reverses tax-hike plan for workers abroad

Personal income tax for employees who have left the country will remain at 13%, a deputy minister has announced
Russia reverses tax-hike plan for workers abroad

The tax rate for Russian citizens who work outside the country will remain unchanged regardless of their tax residency status, the Finance Ministry announced on Thursday.

Personal income tax for employees who have left Russia and work abroad under labor contracts or civil law agreements will stay at 13-15%, Deputy Finance Minister Aleksey Sazanov said.

In 2021, Russia implemented a progressive tax system with a basic rate of 13%, rising to 15% for those earning over 5 million rubles ($61,500) per year.

“Regardless of their status – Russian tax resident, non-resident – their income will be taxed at the personal income tax rate of 13-15% provided for Russian tax residents,” Sazanov said in a statement. “Clarification of the types of income of remote employees and the application of a single tax rate will significantly simplify the tax administration mechanism for tax agents.” 

The announcement was made after the government postponed the adoption of a draft law that proposed to more than double the tax rate for workers abroad.

In April, the Russian government submitted a bill to the State Duma that would oblige companies to levy a 30% personal income tax on payments to Russians who have lived abroad for more than six months and have lost their tax residency status.

The controversial bill was withdrawn a day after being submitted.

According to the Cabinet of Ministers, the bill required “a number of technical clarifications.” The finalized version of the tax amendments has now been sent to the Russian parliament, and if approved will come into effect from January 1, 2024.

For more stories on economy & finance visit RT's business section

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