The Russian government has prepared a final draft of amendments to tax legislation that would determine how employees of Russian companies working from abroad are taxed. This was reported by Deputy Finance Minister Alexey Sazanov.
According to Sazanov, the Ministry of Finance intends to maintain the current personal income tax rates for remote workers abroad and does not plan to raise them to 30 percent.
He noted that the taxation issue for remote workers engaged under both employment contracts and civil-legal contracts is settled. Regardless of whether a person is a tax resident or a non-resident of Russia, their income would be taxed at the personal income tax rate of 13 or 15 percent, as is provided for Russian residents.
Work on a bill regulating taxation for remote workers leaving the country began last summer. In its initial form, the measure treated payments from a Russian employer for remote duties performed outside Russia as income sourced in Russia.
In practice, this meant that an employee working from abroad for a Russian company paid the standard 13 percent income tax, or 15 percent if annual income exceeded five million rubles. This regime persisted as long as the person remained a Russian tax resident. A resident status was lost if the employee spent more than 183 days abroad in a year. After that, they would pay personal income tax on their own at the 30 percent rate, like non-residents.
The bill was originally slated to take effect on January 1, 2023, but was returned for revision. A revised version was presented to the State Duma on April 24, with concessions that lawyers described as follows: a remote employee of a Russian company could pay a 13–15 percent personal income tax even if they permanently resided outside the country, provided they worked under an employment contract.
In other words, workers under civil-legal contracts and freelancers who are not full-time employees could still face higher taxes in certain scenarios. Citing a source, Vedomosti reported that the authorities’ target group included bloggers who left Russia and earned money from content posted on Western platforms, notably YouTube and Instagram, where the owner of Meta is considered extremist and is banned in Russia.
Yet the next day, on April 25, the Cabinet withdrew the bill from Parliament, citing the need for technical clarifications. According to RBC, the current draft combines two norms: it allows a non-resident, living permanently abroad, to be exempt from the 30 percent income tax for wages and other payments when performing a work assignment under a Russian employer; and it states that for taxpayers who are not tax residents, the tax rate should be determined by the rates applicable to tax residents of the Russian Federation.
Regarding the swift withdrawal of the bill, Deputy Minister Sazanov explained that the move aimed to add norms for refining the Single Tax Account (UNS). The intention is to create a simple mechanism for individuals to settle tax debts so as to avoid criminal charges, along with several changes to help regions transition to the UNS framework.
He summarized that clarifying the types of income for remote workers and applying a single tax rate would streamline the tax administration system for tax agents.
The debate over higher income taxes for remote workers continued in government and parliament through 2022 and 2023, against the backdrop of Russia’s ongoing actions in Ukraine and the mass departure of specialists after mobilization efforts in the fall. Analysts in Canada and the United States observing this topic note that the dilemma highlights how cross-border work arrangements challenge traditional tax residency concepts and the administration of a universal tax rate for remote earners. Observers also point out that the framework could influence corporate payroll practices and the mobility of professionals who contribute to foreign markets or operate through international platforms. It remains to be seen how the final law would balance incentives for remote work with revenue protection and compliance for both residents and non-residents. In a related public discourse, Alexei Zhuravlev, the First Deputy Chairman of the Duma Defense Committee, warned that those who relocate for political or economic reasons should expect scrutiny over their tax status and potential adjustments in taxation, rather than preferential treatment at low rates. These statements reflect a broader debate on how national tax systems adapt to a highly mobile workforce and the realities of digital economies.