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Sumarokov-Elston
19-10-2011, 09:05
For the past three years, I have been non-resident in Russia for tax reasons, and am currently going through the process of selling my flat (owned by myself, a UK citizen, for just over 10 years). I have two main questions:

(1) The estate agents say the sale can be officially listed as only costing 1 million roubles, because that is what Russians do to avoid paying tax on the proceeds. But does this rule apply to non-residents? I had an idea that all non-residents had to pay 30% even if the sale price was below 1 million roubles?

(2) How do you actually pay the tax once you have up and left the country? All I have done before is filed income tax returns with the local tax office. Do I have to return to Russia to pay the tax, so I do not have any problems with future stays in the country (eg. not being allowed to leave), or do they find me via a UK address that I have to give?

Bogatyr
20-10-2011, 11:25
For the past three years, I have been non-resident in Russia for tax reasons, and am currently going through the process of selling my flat (owned by myself, a UK citizen, for just over 10 years). I have two main questions:

(1) The estate agents say the sale can be officially listed as only costing 1 million roubles, because that is what Russians do to avoid paying tax on the proceeds. But does this rule apply to non-residents? I had an idea that all non-residents had to pay 30% even if the sale price was below 1 million roubles?

(2) How do you actually pay the tax once you have up and left the country? All I have done before is filed income tax returns with the local tax office. Do I have to return to Russia to pay the tax, so I do not have any problems with future stays in the country (eg. not being allowed to leave), or do they find me via a UK address that I have to give?

I was under the impression that if you held the real estate for more than 3 years then you do not owe any tax on profits after a sale. Don't recall where I heard that so it may not be entirely reliable. But I'd look into it.

Sumarokov-Elston
20-10-2011, 11:46
Yes, I have heard the three-year rule mentioned, but I do not think this is the case.

I suppose the vital question is how do the tax people get their information: is it the notary or the GBR people who pass on information on deals over 1 million roubles to the tax office? If so, then they would not know if I will be a non-resident in that year or not, so I am thinking the fact that I am a non-resident might not automatically override the over/below 1M roubles rule...

I have learnt that regarding payment it is your responsibility to file a tax return before 30.04 of the next year, else there can be problems entering and leaving the country after that date.

Bogatyr
20-10-2011, 13:41
Yes, I have heard the three-year rule mentioned, but I do not think this is the case.
... because? ....

Sumarokov-Elston
20-10-2011, 17:21
... because? ....

Because apparently all tax privileges (льготы) are only for residents.

ilya25
22-10-2011, 05:21
For the past three years, I have been non-resident in Russia for tax reasons, and am currently going through the process of selling my flat (owned by myself, a UK citizen, for just over 10 years). I have two main questions:

(1) The estate agents say the sale can be officially listed as only costing 1 million roubles, because that is what Russians do to avoid paying tax on the proceeds. But does this rule apply to non-residents? I had an idea that all non-residents had to pay 30% even if the sale price was below 1 million roubles?

(2) How do you actually pay the tax once you have up and left the country? All I have done before is filed income tax returns with the local tax office. Do I have to return to Russia to pay the tax, so I do not have any problems with future stays in the country (eg. not being allowed to leave), or do they find me via a UK address that I have to give?

You could include any price in sales agreement you want. I am just wondering how the buyer agree for that since in case of problems they could ask from you only that amount
If non tax resident you are not eligible for any deductions you will need to pay 30% of selling price as Russian income tax (probably you could apply this as a tax credit for your UK taxes - check with UK tax office)

If you are leaving Russia for good you need to file a tax return 1 m before departure and pay taxes 2 weeks before. Info about property sales will be transferred to tax authorities by state proprty registration authority that should register the deal

Sumarokov-Elston
24-10-2011, 23:05
Thank you for that information. We have discussed with the buyer the matter of writing another figure in the official documents, he is OK with that.

Is the tax on property sales included in the document on подоходный налог or is something separate?

Bogatyr
26-10-2011, 17:12
Thank you for that information. We have discussed with the buyer the matter of writing another figure in the official documents, he is OK with that.

Is the tax on property sales included in the document on подоходный налог or is something separate?

Writing in a lower purchase price is disadvantageous for the buyer for another reason: Russian tax residents (you don't have to be a citizen) can take a one-time tax deduction of (I think) 2 million rubles (or perhaps more I don't recall the details). That of course assumes the person pays taxes....

ilya25
27-10-2011, 02:09
Thank you for that information. We have discussed with the buyer the matter of writing another figure in the official documents, he is OK with that.

Is the tax on property sales included in the document on подоходный налог or is something separate?

sorry i am a bit confused there are 2 taxes - property tax is paid by owner once per year - you should be getting notifications from tax authorities with amounts

income tax will need to be declared and paid after sales is completed

property sales are registered via special state registration agency and info is communicated to tax authorities