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Thread: Highly Skilled/Paid - Work/Visa Permit Questions

  1. #16
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    Quote Originally Posted by ilya25 View Post
    I disagree that it is illigal, especially if a foreign income is fully reported and taxes are paid in Russia . People may have several employment contracts.
    But the problem is that it's work being performed in Russia. If he pays Russian tax on it, it's fine as far as tax law is concerned. I'm not so sure about labour laws and what the requirements for work contracts are.

    If he pays tax in France, he also has to pay tax on the same income in Russia, because it's Russian-sourced income. The double tax agreement would not apply in his situation, so to use it would be fraudulent.

  2. #17
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    Quote Originally Posted by inorcist View Post
    That's pretty much the way it is if you want to make it legally.

    When I came to Russia for the first time it was for an assignment and we had to figure out a way how to do it as well.

    The solution was to put my contract at home on unpaid leave while I'd be on a local Russian contract during the assignment and also get my salary paid out locally in Russia.

    The main problem still was social security back home. The workaround was that my employer kept on paying for me at home and I had to pay back the difference at the end of the year. At the same time my Russian salary was increased by this amount.

    In the end it was a zero-sum game. But to figure out the logistics and tax implications was tough.
    Thanks for sharing your example. I confirm that with Russian "strange" laws
    it is diffucult to design approapriate compensation schemes, that would be compliant and meet employee's interest. So it is realy nice that you found a workable solution

    Can you pls clarfy the following:

    The workaround was that my employer kept on paying for me at home and I had to pay back the difference at the end of the year. - You mean your portion of social taxes that should be deducted from your salary back at home ?

    Did you have to deal with double taxation of your Russian income back at home


    Thanks

  3. #18
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    Quote Originally Posted by DavidB View Post
    But the problem is that it's work being performed in Russia. If he pays Russian tax on it, it's fine as far as tax law is concerned. I'm not so sure about labour laws and what the requirements for work contracts are.

    If he pays tax in France, he also has to pay tax on the same income in Russia, because it's Russian-sourced income. The double tax agreement would not apply in his situation, so to use it would be fraudulent.
    I guess tax authorities will not allow to apply the treaties provisions w/o appropriate reasons. But overall I guess that is the main idea of such agreements- if income was taxed in one country, it should not be tasked in another.

    But I agree with you - local payroll for foreigners working in Russia is a more clear cut approach. Because for example having a foreign company EE in Russia may trigger the need of that company to register its commercial presence in Russia and start paying Russian taxes

  4. #19
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    Quote Originally Posted by ilya25 View Post
    The workaround was that my employer kept on paying for me at home and I had to pay back the difference at the end of the year. - You mean your portion of social taxes that should be deducted from your salary back at home ?
    Exactly, social taxes as you call it and pension fund contribution.

    Quote Originally Posted by ilya25 View Post
    Did you have to deal with double taxation of your Russian income back at home
    No, I didn't. I guess what was important from a tax perspective was that I was outside Switzerland for more than 183 days within a year and that during this period I did not perform work for a company within Switzerland or receive a salary from Switzerland.

    Maybe I was also lucky that Swiss tax authorities are more reasonable when it comes to such issues and as far as I know the OECD double taxation treaty is in place between Russia and Switzerland. But I can be wrong, I'm not a tax expert.
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  5. #20
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    It's always confusing when you start to deal with tax treaties, but the basic rule is this: the income should first be taxed in the country where it is produced (i.e., Russia if you are being paid for work that you do on Russian territory). If tax is also due in the treaty country, you can get a credit for the Russian tax that you had to pay in the first country.

  6. #21
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    Quote Originally Posted by DavidB View Post
    It's always confusing when you start to deal with tax treaties, but the basic rule is this: the income should first be taxed in the country where it is produced (i.e., Russia if you are being paid for work that you do on Russian territory). If tax is also due in the treaty country, you can get a credit for the Russian tax that you had to pay in the first country.
    As far as I recall there're three types of common tax regimes when it comes to double taxation:

    - All global income is subject to taxation but you get tax credits when you also have to pay taxes in another country (e.g. the US have such a regime)
    - taxes are due where the actual work was performed independently from where the income was paid (most continental European countries)
    - taxes are due where the income was paid no matter where the actual work was performed (Taiwan, Singapore and Hong Kong if I remember correctly).

    This can lead to some interesting consequences, e.g. when you live and work in Singapore but your employer sits in Germany and pays your salary there.
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  7. #22
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    МИГРАЦИЯ, who can read russian...

    this is the newspaper of the ФМС, the Immigration Dept.
    There they explain on page 1 and 3 about the 'highly paid specialists' and on page 20, who is considered on. They have added some categories and there are now 32 jobs that fall into that section.
    i think it is a very useful paper,not that it matters, because we know what the law and the Kremlin or White House decides is by far not always executed down by the little bureaucrat or Inspector who wields more power then VV.
    There is no greater treasure then pleasure....

  8. #23
    manuir2001 Guest
    Thanks all for for your comments,

    In the meantime I have also investigated with some local HR and Legal people.

    The output is that I need to get a local employment contract to get the work visa - if it is more than 2M RUB per year then I can benefit from the High Skilled/Paid process - Nothing prevent to keep some foreign income (so keep one part of my income in my home country) as long as I declare this oversea income and pay the personal income tax in Russia.

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