The Russian Ministry of Finance has proposed several adjustments to the individual income tax, which are expected to be applied during 2022-2024.
One of the changes introduces an increase in the tax burden of some groups of employees. The main change would mean that foreign tax residents, who spend less than 183 days in Russia but are working remotely for a Russian company, may be required to pay personal income tax in Russia, while the employer would be responsible for tax deductions.
This requirement does not exist currently. The new change would require employers to familiarize themselves with Russia´s double tax treaty documents in order to understand how and in what amounts taxes should be paid, creating an additional tax administration burden.
Another change concerning remote working tax conditions would somewhat lessen the tax burden for organizations which have employees working remotely. The Ministry of Finance proposes that reimbursements for employees for equipment, materials etc. used in remote working would not be subject to personal income tax, as long as those reimbursements do not exceed a pre-determined threshold.
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