PDA

View Full Version : Russian Taxes for TRP working abroad



astgtciv
01-05-2012, 02:14
Hi, guys! New to the forum, great to see so many lively discussions!

My situation is that I (US citizen) recently got the TRP (РВП). I work remotely for a US company, and pay the taxes there. Does anyone know if I am still required to file a tax return in Russia? I've found that citizens of countries which require a visa in Russia are not required to obtain an ИНН (tax id number), although they can voluntarily obtain it. I suppose this could mean that we are also not required to file a tax return here (which would require the ИНН)?

As I understand even if I need to file the tax return in Russia I would be exempt from paying russian taxes under the Russia-US 1992 double taxation agreement? In that case I need to provide proof that I pay taxes in US, what kind of proof would that be, did anyone go through this?

DavidB
01-05-2012, 03:10
You'll have to obtain an INN eventually because your TRP only lasts for 3 years and before it expires, you'll have to show your INN certificate to get your ВНЖ.

Also, the fact that immigration law provides you with an exception doesn't mean that you're exempt from other laws. The tax code is very specific about the requirement to obtain an INN and file a return if you have foreign-sourced income.

You have to file a return each year to claim claim tax treaty benefits. Maybe you have a statement from the IRS which shows how much income you declared and how much tax you paid on that income. If you filed electronically, you can probably just print a copy of what you filed.

Around tax time each year you'll see Tadjiks wearing those sandwich billboards with 2-НДФЛ written on them. Those places can help you file your return.

astgtciv
01-05-2012, 21:23
Thank you, David. Have you ever actually gone through the process of filing the russian НДФЛ and taking advantage of the tax treaty?

DavidB
01-05-2012, 22:14
I've claimed treaty benefits in the past, but not on US-sourced income. I would suggest taking all of your documents to either a tax professional or directly to nalogovaya, where you can ask what their requirements are.

ilya25
02-05-2012, 03:31
Hi, guys! New to the forum, great to see so many lively discussions!

My situation is that I (US citizen) recently got the TRP (РВП). I work remotely for a US company, and pay the taxes there. Does anyone know if I am still required to file a tax return in Russia? I've found that citizens of countries which require a visa in Russia are not required to obtain an ИНН (tax id number), although they can voluntarily obtain it. I suppose this could mean that we are also not required to file a tax return here (which would require the ИНН)?

As I understand even if I need to file the tax return in Russia I would be exempt from paying russian taxes under the Russia-US 1992 double taxation agreement? In that case I need to provide proof that I pay taxes in US, what kind of proof would that be, did anyone go through this?

Yes if you spent more then 183 days in Russia on 2011 you need to seld diclare and pay russian income tax on your foreign income. By the way you missed the deadline already -it was Apr 30
I guess for your residency permit you may need to prove your source of income and tax return may be handy, not sure though
I heard that it may be diffucult to claim tax treaty examption in Russia. Probably you'd better pay Russian tax and claim relevant deduction in the USA?

Bogatyr
02-05-2012, 23:26
Yes if you spent more then 183 days in Russia on 2011 you need to seld diclare and pay russian income tax on your foreign income. By the way you missed the deadline already -it was Apr 30
I guess for your residency permit you may need to prove your source of income and tax return may be handy, not sure though
I heard that it may be diffucult to claim tax treaty examption in Russia. Probably you'd better pay Russian tax and claim relevant deduction in the USA?

This has been covered before (try search for "FEIE"), but briefly:
US:
+ The US taxes its citizens on worldwide income regardless of place of residence
+ US citizens residing outside of the US who satisfy the requirements can take a credit (foreign tax credit) or a hefty deduction (foreign earned income exclusion, or FEIE)
+ Even if you take the FEIE for the "regular" tax calculation, self employed income is still subject to the self employment tax!
+ If you are a US citizen working for a US company, you will need to pay social security/medicare regardless of foreign tax credits, FEIE, etc.
+ Nothing is automatic! You must file your US taxes in order to receive for foreign tax credit or FEIE, you can't just "figure" that you don't owe anything and not file with the IRS, in this case you LOSE the FEIE and are subject to the full tax bill as if you lived within the US.

Russia:
+ if you're inside Russia more than 183 days of a year you are a tax resident of Russia and taxed on your worldwide income.
+ You will need to show income or savings (be able to prove you can support yourself in Russia) in order to apply for Russian PRP, including having paid Russian taxes on any earned income.
+ (I don't know about reducing Russian taxes from having paid US taxes, sorry...try DavidB's advice and contact a Russian tax expert, preferably one with direct experience in this matter).