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View Full Version : Dodgy tax situation, should I be worried?



ralphodog
17-07-2013, 09:40
So I got offered an expat job where during the course of salary negotiations, they said that my salary for the first year would be "tax exempt" and paid either in cash in Russia or to a bank account in another country. As far as I'm aware, there aren't any real schemes for tax exempt salaries, so I'm guessing that this will mean they're paying me under the table. From what I understand, employers in Russia are responsible for withholding and paying the taxes, not employees, correct? Should I be worried that they're doing this, or would the burden be completely on them?

Arthuro
17-07-2013, 12:44
Formally you should be worried, but in small companies that is more or less ordinary when your official salary is say 15-20 k roubles.
Of course in this case, the salary should be higher enough
The employer is responsible and I hardly remember any case it influenced an employee negatively (I mean the tax police cases)

White salary is usually necessary for a credit or for a pension fund.
I guess you dont need anything of it.

Matt24
17-07-2013, 12:59
So I got offered an expat job where during the course of salary negotiations, they said that my salary for the first year would be "tax exempt" and paid either in cash in Russia or to a bank account in another country. As far as I'm aware, there aren't any real schemes for tax exempt salaries, so I'm guessing that this will mean they're paying me under the table. From what I understand, employers in Russia are responsible for withholding and paying the taxes, not employees, correct? Should I be worried that they're doing this, or would the burden be completely on them?

I would agree with Arthuro that it's a well known, (but I would add dying practice) in smaller Russian businesses to have white and slightly greyer salary schemes - where your declared income comes through the white scheme and the bulk is off the tax radar - However you seem to be suggesting something different whereby 100% of your salary will be grey (?) that would be worrying - I think that would put your visa status at risk, also any claims on the company re IP or project ownership / profit share / expenses would be impossible because no salary = no job = no claim. Again as Arthuro says the tax people are very unlikely to be interested in you, but your employer has a huge hold over you under these conditions, if they get bored with you / decide to delay payment etc.

Remington
17-07-2013, 13:07
If you're hired as a employee of the company then its the employer's responsibility to pay taxes. If the employer fail to pay taxes then they'll be fined.

If you're hired as a contractor then its your responsibility to pay taxes.

MashaSashina
17-07-2013, 14:37
+1 to Matt24.
I would worry not about taxes, but about your visa (officially you won't have any income here) and relationships with your employer: they will be able to decrease or delay your payments, or just say good bye one day with no compensation at all.
Those are risks, the company doesn't have to have it in mind actually.

Remington
17-07-2013, 15:19
+1 to Matt24.
I would worry not about taxes, but about your visa (officially you won't have any income here) and relationships with your employer: they will be able to decrease or delay your payments, or just say good bye one day with no compensation at all.

This is pretty common with companies that pays under the table. I know several friends of mine got burned this way. They got hired, worked for 2 or 3 months without pay and got a note from the employer saying "thank you and we don't need you anymore". This happened to me once with NGO in Moscow.

If they don't offer a written contract or visa support... walk away.

ralphodog
18-07-2013, 07:58
This is pretty common with companies that pays under the table. I know several friends of mine got burned this way. They got hired, worked for 2 or 3 months without pay and got a note from the employer saying "thank you and we don't need you anymore". This happened to me once with NGO in Moscow.

If they don't offer a written contract or visa support... walk away.

There's a contract, they handle the visa and pay all fees, and they're taking care of flights. Still, it makes me a bit worried because they could theoretically let me go and stiff me on a month's worth of wages.