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Thread: Receiving wages from a foreign job

  1. #1
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    Receiving wages from a foreign job

    If I work for a foreign company (with no base in Russia), what's the best way to legally have the money paid to me and also pay my taxes in Russia?

    a) Work as an employee and have the money paid to my Russian personal account? In this case do I need any kind of documentation to show currency control where the money is coming from?
    b) Work as self employed (IP), have a Russia friendly contract written up and go though the hassle of doing invoices and acts etc every month.
    c) Something else?

    Also which is the most tax efficient approach?

  2. #2
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    This isn't going to answer all of your questions, since I am not here as a worker, but in terms of transferring money to Russia, I have been doing that for the past 3 years or so and have never had any problems s far.
    Initially the money was required to purchase a house, so there was quite a large sum transferred. Following that I made several transfers to pay for repairs and improvements. Now that I am living in Russia, I make regular transfers to live on.
    I have a bank account in Luxembourg where I used to work and where my salary used to be paid and where my pension is now paid (I am now retired) and a bank account in Russia with Sberbank. As much out of courtesy as anything else since Sberbank never asked, I did tell them where the money came from (so much for anti money laundering checks ) and I also informed my bank in Luxembourg what was going on.
    I have never been asked to fill in any forms (neither on the sending side nor on the receiving side) regarding currency control. Note that most amounts I transfer are under €10000 but two transfers have been for more (but less than €50000).

    Re: taxes, I haven't been here long enough to worry about that. That will be for later this year or next.

  3. #3
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    Hi BigBear,
    Cold you please tell us about the fees that you had to pay to Sberbank and/or to your bank in Luxemburg?
    Was it a difficult process?
    Could you have done it online?
    Thanks!

  4. #4
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    Hi Max,

    Quote Originally Posted by Max1982 View Post
    Hi BigBear,
    Cold you please tell us about the fees that you had to pay to Sberbank and/or to your bank in Luxemburg?
    Was it a difficult process?
    Could you have done it online?
    Thanks!
    If you mean fees for opening the accounts, no, there weren't any.
    If you mean fees for the transfers, bear in mind that I do them online and that there is no need for manual intervention, so I pay minimal fees. In fact, now I've set up a standing order with my bank (done online) to transfer a smallish amount every month to cover our living expenses. My bank in Luxembourg charges me 0.15% with a minimum fee of €5 and a maximum fee of €100. Transfers are same day, by the way.
    As for Sberbank, to be honest I'm not sure if they charge me anything. Their credit advice is anything but informative, just giving me the amount credited (i.e. in roubles) and not even indicating the exchange rate. However, their exchange rates are not very good at the best of times with quite a big spread so I guess they make their money on that.

    Could I have opened the account online? Not as far as I know. Most banks need to see the account holder in person as part of the anti-money laundering measures that have been brought in, even in Russia.
    I'd be happy to admit I'm wrong if someone wants to comment otherwise.

    Sberbank were good at providing the necessary information to enable me to make transfers, such as the SWIFT BIC of the regional center (I live in Krasnodarskiy kray, but the regional centre for transfers is in Rostov and it is the BIC of the Rostov centre that I have to mention in my payment instructions). So the instruction is quite simple: pay to Sberbank Rostov in favour of my account xyz. I always transfer euros and specify either the account number of my rouble account if I want to receive roubles, or the account number of my euro account if I want to receive euros. I do not have to tell my bank in Luxembourg the name of the euro correspondent bank of Sberbank.

    Hope this helps.

  5. #5
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    if you work with a company outside of russia, why pay russian taxes?

    unless your overall plan is more complicated, why make it that way?

  6. #6
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    Quote Originally Posted by americaninmoscow View Post
    if you work with a company outside of russia, why pay russian taxes?
    If you live in Russia and this is your only source of income, then you simply may have to pay tax in Russia of these money, there may be double tax treaties between Russia and the country where the income comes from (and you may pay tax there) that specify that you do not need to pay tax in Russia.

    Tax in Russia, general speaking, have fun:https://www.nalog.ru/eng/taxation_in_russia/
    If you need more fun the put "об избежании двойного налогообложения", "налоговый договор" into Google and see what he can find of entertainment.

    When it comes to income, no matter what kind of income, that you get from an other country than the one you are in when you get the money, then you have to be very careful, you may be an object for taxation both in the country where the money comes from and in the country you are staying in, and maybe also in the country of you resident, and the country(s) where you are a citizen.
    You should investigate the tax rules in the country's in question, get written answers, be honest about what information you supply them with when you ask questions, then you have an informed basic to make a decision if it is worth cheating the tax system. Be aware that no all staff members in a tax office fully know the details about taxing of money from/to abroad, they may only know a very simplified version, and of course it do not cover your case, but the paperpusher just do not know this and it can end up being your problem.

  7. #7
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    Quote Originally Posted by Hans.KK View Post
    If you live in ...., then you simply may have to pay tax in .....
    Sounds like you have too much money.

    Let's be honest, there is no honor in paying more taxes than you have to.

    In fact, it should be your duty to pay the least amount of taxes as is possible.

    If you self-report, then you will probably have even more problems. To go one step further, if you actually choose this route, then you admit to working, and the question then arises, do you have a work permit? etc. and now you have could have visa problems in addition to tax problems.

    Another question to comes mind.

    If you choose to pay Russian taxes, there could be other issues. You would have to pay 30% or something like that till you become a tax resident, and only then submit a refund to get back the difference between your old and new tax rates.

    You would probably also have to apply for the INN, or the tax number. Then you would have to pay into your pension n more.

    Just more headache and for what? More than likely a measly 2-3k euro a month? Now reduced down to 1-2k euro a month because you wanted some kind of "i done good" stripe on your shoulder?

    maybe. who knows.

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    nicklcool (19-03-2019)

  9. #8
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    Quote Originally Posted by americaninmoscow View Post
    Sounds like you have too much money.
    No to much, but I have what I need for everyday.

    Let's be honest, there is no honor in paying more taxes than you have to.
    I did only speak about "Paying the tax you have to", nothing less, nothing more.

    In fact, it should be your duty to pay the least amount of taxes as is possible.
    Sorry, you can choose what tax you want to pay, there is rules/laws about this.

    If you self-report, then you will probably have even more problems. To go one step further, if you actually choose this route, then you admit to working, and the question then arises, do you have a work permit? etc. and now you have could have visa problems in addition to tax problems.
    Fools are the once that try to fly under the law radar it may be the visa laws, the migrations laws, or the tax laws, sooner or later things will not go their way and they have to pay, maybe serve jail time, or leave the country.
    Before you try to do anything regarding attempt to reduce/escape taxation of you income, then you should seek information on the tropic at all relevant places, that may be at the tax authority in you country of citizenship, the tax authority in the country of your permanent residency, the tax authority in the country where the money comes from, do not relay on clever people on the internet, never, never.

    All I try to tell is that tax, in this forums context, living / working international, may not be that easy and simple as some people hope for, and it differ a lot depending on you citizenship, place of permanent residency, and where you get you money from and where you receive them, even the journey that the money takes can matter.

    If people want to follow the rules/laws is a personal thing, I do not blame people that try to avoid tax paying as long as they take the punishment up front, if they start to cry that the tax system is taking their money and other shit then I piss on them.

    If you want to cheat and/or think you are smarter than the system then you may be in for a surprise one day. I had happen to work where the tax authority was seated, I had seen the consequence of smart guys taking care about their tax and tax paying, they ended up paying tax + fee + jail time, and they lost their company, their house, their family, I am not sure that it was worth the price, but what do I know, for some people it is a pleasure in it's own right just to have been able to cheat the system, especially the tax system.

    There is legal ways to reduce the tax you have to pay, it do require that you have a great freedom about where you make you money, when you make them, and when you stay where in the world.

    If tax in general is fair, or at the right amount is a total different issue.

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    americaninmoscow (25-03-2019)

  11. #9
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    Either way is fine. You have to decide what is better for you. If you are currency resident (live on TRP, PRP, etc) you have to provide russian bank a contract showing what work you do for the foreign company, how much they pay you, etc. This is strictly required by currency control. I would open couple accounts in russian bankne in euro or $ (it depends on where your employer is located) and another one in rubles. I would receive salary to the account in euro or $. Then you can better manage your money and exchange it in different bank with better rates, etc. Taxes are different story. Most likely if you are employed in foreign company they are taking taxes from your wages. But I assume you are a tax resident in Russia (you live more than 183 days in a year in Russia), then you have to pay an income tax in Russia. You have to prove tax agency that you have already paid taxes to the foreign country (you need a document), and based on the rate you either pay the difference to Russia or not. Most likely not since income tax rate in Russia is pretty low. But the country where your employer is located should have an agreement regarding avoiding double taxing with Russia. But this reconciliation with russian tax agency will be a hassel.
    Been self emloyed is a little bit different. You better request and receive a patent and pay fixed tax amount.

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