Moscow

What is Resident?

18 Jul 2017

Resident is one of those Russian words which sounds just the same like its Latin-English counterpart. In Russian, the word has different meanings because the term is used in different laws and its use often leads to an incomplete or wrong understanding of the situation.
The Russian Tax Code defines a resident as an individual who stays in Russia for more than 183 days during the calendar year. Be careful to count days of arrival as well. This means you fall under the lower Russian personal income tax rate, 13% instead of 30%. But a double tax treaty can have additional rules defining tax residency: having your family or house outside Russia will usually lead to taxation of your worldwide income in your home country rather than in Russia. Some people think they can choose where to pay tax, as long as they pay something somewhere. Unfortunately that is not true: paying tax in the wrong country can easily lead to double taxation, or to sleepless nights about the possible consequences of non declaring income. Luckily Russian law is very tolerant against late filing: the late payment penalty is maximised and late payment interest is linked to the Central Bank refinancing rate. Russian currency legislation also has a definition of resident, which is an individual holding a Russian passport or residence permit (vid na zhitelstvo). If you have a double nationality, your Russian passport will still make you a resident for currency purposes. A currency resident is allowed to have a bank account abroad but must report this to the Russian Central Bank.

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