Russia’s finance ministry outlined proposals to tax people working remotely from abroad for Russian companies at the standard income tax rate even if they lose their tax residency.
Moscow looks for ways to maximize revenues as the war carries on. Thousands of Russians have fled since Moscow invaded Ukraine, leaving Russia with fiscal holes to plug as it presses on with its military campaign.
The government has for months been exploring ways to solve the issue. They even proposed punitive tax rates for those working abroad and bans on remote work for some professions.
A person loses Russian tax residency if they are abroad for more than 183 days in a calendar year.
“The issue of taxation for remote employees who work with organizations under both employment and self-employment contracts has been resolved,” Deputy Finance Minister Alexei Sazanov said this Thursday.
“Regardless of their status – Russian tax resident or non-resident – their income will be taxed at 13%, or 15% if it exceeds 5 million roubles ($64,333) a year. Clarifying the types of income of remote employees and applying a unified tax rate will significantly simplify the tax administration mechanism for tax agents.” Sazanov
Having relatively portable jobs, IT workers are among the many Russians who fled and the government estimated in late December that 100,000 IT specialists were working abroad and will now be affected by this law.