At Work in Moscow

Tax system in Moscow

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The tax system in Russia underwent a comprehensive reform in the year 2001. This was to ease the tax burden on individuals and companies and to simplify the classes of payments for national insurance. The tax year in Russia is the year ending on December 31. Russia is unique in that there are equal rates for unmarried and married individuals.

  • Russia has a uniform rate of tax on the income of individuals. As of 2008, tax in Russia is payable at the rate of 13% for an individual on most income. (30% for non-residents - less than 183 days).
  • Russian residents pay 9% on dividend income which is deducted at source. Non-residents pay 15% on dividend income.
  • The standard rate of Russia corporate tax in 2008 is 24%.

Moscow also has a 5% sales tax that is usually only encountered in top hotels.

If you have one employ, the company is the tax agent, and is responsible for withholding 30% (or 13% if you've been here 183 days of the past 12 months) monthly (pay-as-you-go system). At the end of the year, the company files a tax return for you. Once you can prove you've been in Russia for 183 days of the past 12 months, the company, as the tax agent that withheld the money, is responsible for returning the extra 17% to you. They can do it over several months, or in a lump sum. Some people have not been able to receive an actual payment, but receive instead a credit on future payments until it equalizes.

Many people avoid the troubles of figuring out tax by negotiating their salary net of tax, so the figure on your contract is what you receive. Your employer then deals with the tax without you needing to get involved at all.

There are countries that have an agreement with Russia to avoid double taxation. They are:
Albania, Algeria, Australia, Austria, Armenia, Azerbaijan, Belarus, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Kazakhstan, Korea, North Korea, South Kuwait, Kyrgyz Republic, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Mali, Mexico, Moldova, Mongolia, Montenegro, Morocco, Namibia, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Qatar, Romania, Serbia, Singapore, Slovakia, Slovenia, Spain, South Africa, Sri Lanka, Sweden, Switzerland, Syria, Tajikistan, Turkey, Turkmenistan, Ukraine, UK, USA, Uzbekistan, and Vietnam.

Update 10/07/2009


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Taxes in Russia
For those who are interested in Taxes in Russia, our expatriate company Awara Group has developed a Russian Tax guide:

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