Ministry of Finance has developed a law project to withhold personal income tax from a remote foreign employee. Now employees who live outside and work remotely in an organization registered in Russia will pay personal income tax. The responsibility for withholding tax lies on the employer.

That the rule does not apply to people working in a branch of a Russian company abroad.

In this way:

  • Employees who work and receive payments in Russia, and living outside the country for more than 183 days – shall pay tax at a rate of 30%.
  • Employees permanently residing and working in Russia pay personal income tax at rates of 13% or 15%.

This rule shall exclude the possibility of “tax optimization” of personal income tax from payments to remote workers. Before that was possible when employees did not have tax residency in any state or received residency in a low-tax country.

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