The Ministry of Finance has developed amendments to the Tax Code that change the procedure for paying personal income tax for Russians who work under civil contracts with Russian persons. The agency abandoned the idea of keeping personal income tax, an employee who has left for abroad and works remotely, through the employer department. To date, the initiative is being approved by the concerned departments.
Now individuals must pay income tax themselves if, according to an employment contract, they work remotely from abroad. If there is no such clause in the employment contract, the personal income tax is paid by the employer according to the general procedure. The Ministry of Finance proposed to abandon this distinction and collect personal income tax through the employer in all cases.
To date, the Ministry of Finance explains: citizens who have left, who continue to work for Russian legal entities under an employment contract, must pay income tax (personal income tax) themselves at a rate of 13% or 15% (if the annual income exceeds five million rubles). Freelancers who have lost their residency and have formed a relationship with an employer under a civil law contract (GPH) will be charged personal income tax at a rate of 30%.
The need for such changes in the department is explained by the fact that a large number of Russians often change their country of residence and may lose their tax residency in Russia and not acquire any other. Now it is proposed to apply such norms only to freelancers, and only if they receive funds to accounts in Russian banks. This rule will not apply to individual entrepreneurs and the self-employed. At the same time, earlier in the State Duma proposed to abolish the tax regime of the self-employed for Russians who left the country altogether.
The Tax Code now imperatively establishes that retired freelancers have obligations to calculate and pay personal income tax as long as they are considered tax residents of Russia. Upon termination of this status, they will not have the object of taxation itself.
The text of the announced amendments to the tax legislation is already being approved by the relevant departments, after which it is expected to be submitted to the State Duma. At the same time, the State Duma does not exclude that not all employers will have the right to set the usual personal income tax rate for their departed contract workers.