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Welcome from Alinga!
This month the Alinga Market Update pays significant attention to recent changes concerning the status of foreigners living in Russia. You'll find information on taxes for US citizens as well as an article about the new "90 day rule" for those traveling to Russia without work permits, etc. In addition, we've lots of other information (as usual!) about doing business in Russia, including the new ruling on prosecuting tax evaders (which includes foreigners) and on the process of secondment, a valuable new tool in the HR box!
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Alinga Announces Its Next Seminar!
This breakfast seminar is aimed at providing upper management with a concise understanding of outsourcing in Russia today. A clear analysis of the legal and tax risks and the economic and management benefits will be detailed. A case study of one popular form of outsourcing – accounting services – will further provide you with the information basis to better evaluate outsourcing opportunities for your organization. Find out more!
Notify Your Accountants!
There is much more "Accounting and Payroll" information available in the Russian version of this same newsletter!
Review Of Recent Changes To Tax-Related Legislation In The Russian Federation
This monthly Russian-language service from Alinga and regular feature of the Alinga Market Update is designed to bring your financial personnel a broad view of recent changes to the Russian Tax Code. Forward this link to them!
Secondment And Staff Leasing Of Foreign Staff
This PowerPoint presentation was prepared by Alinga specialist Galina Karogodina and used by Alinga's Managing Partner Chet Bowling during his presentation at AmCham's Annual Tax Seminar. Questions about this issue may be directed to our experts.
The State Duma To Consider Draft Bill On Entrepreneur Income Tax
New draft bill suggests amendments to Article 15 of Part One, and Part Two of the Tax Code of the RF, including an entrepreneur income tax added to the list of local taxes. The object of taxation would be income minus expenses. The tax rate will be established individually for each subject of the RF – from 12% to 15%.
What Taxes Apply If A Russian Company Pays Salary To A Foreigner Abroad?
UST and pension insurance requirements seem logical and clear: pay UST, don’t pay pension insurance. As for personal income tax, if the employee is a tax resident (has lived in Russia for more than 183 days), 13% income tax must be paid. If the employee has spent less than 183 days in Russia for the year, no tax payment is necessary.
FTS Develops Internet-Based Information Service
The Federal Tax Service is trying to keep up with the times: the agency's website now contains new interactive tools that allow individuals to check the trustworthiness of business partners. However, it seems that not all of the advertised services are currently functioning.
Russian Supreme Court Publishes "Treatise" On Prosecuting Tax Evaders
According to a detailed "treatise" recently published by the Russian Supreme Court, non-payment of taxes, failure to fulfill one's responsibilities as a tax agent, and concealment of assets will soon be treated as criminal offenses in Russia.
Russian Companies Incorporated Abroad Will Be Able To Sell Their Stocks In Russia
The Federal Financial Markets Service has drafted a new bill in coordination with government departments. This bill will allow Russian companies registered abroad to place their shares on Russian trading floors. The law is supposed to come into effect by the middle of 2008.
The Ministry Of Justice Considers New Regulations For The Registration Of Enterprises
According to new regulations being considered by the Ministry of Justice, company registration will soon require the notarized consent of the founding members and the owner of the property where company is to be located.
Process Of Marking Alcohol With Excise Duty Stamps Will Be Changed
Currently excise duty stamps are placed not on the neck of a bottle, but on its side. As a result, empty glass bottles are very much in demand on illegal market, since such marking allows their re-using under the pretence of legal alcohol beverages with excise duty stamps.
Are Powers Of Attorney Valid After A General Director Is Dismissed?
When a power of attorney is issued on behalf of legal entity, it is issued not by the general director personally, but by the organization, with the director acting only as an agent of the legal entity (Article 53 of the CC of the RF). Consequently, the period of validity of the power of attorney issued by the general director on behalf of the organization is unrelated to the director’s term of appointment.
Non-Profit Organizations Permitted To Perform Certain Commercial Activities
On September 13, 2007 Michael Fradkov signed a regulation validating a list of commercial activities that a non-profit organization with targeted capital (excluding specialized organizations) may engage in.
Tax Amnesty Legalizes 3.22 Billion Rubles in Profits
The Federal Treasury of Russia announced that, as of September 1, 2007, individual tax payers had declared 3.22 billion rubles in previous income under the new tax amnesty program. The total volume of tax payments on the declared as of September 1st came to 418.8 million rubles.
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Russia And The USA Will Develop An Agreement On Extradition
Russia and the USA agreed to develop an official agreement on the mutual extradition of persons suspected in committing crimes. It was announced after negotiations concluded between Alexander Bastrykin, the Head of Investigating Committee at Russia’s Prosecutor’s Office, and the US Ambassador William Burns.
Outstaffing Again Ruled A Scheme To Minimize UST
Court decision # N Ф09-4597/07-С2 from June 19, 2007, unexpectedly sustained the claim of tax authorities, ruling that companies formed to provide one company with outstaffing services are not economically justifiable.
Discrimination In Job Advertisements To Be Banned
The Antimonopoly Service and the Federal Labor Service (FLS) are in the process of developing a mechanism prohibiting publication of job advertisements with specific age, gender, location and citizenship requirements as “discriminatory.”
Federal Tax Service Cautions Employers Hiring Foreign Workers
An employer or target company using outstaffing services must notify the local tax authority of hiring and employment of foreign workers within 10 days of submitting a request for issuing an invitation for the foreign employee for the purpose of working in Russia.
Major Changes To Visa And Invitation Processes... Again
No longer will it be easy to work in Russia without a work visa.
Medical Certificates For Work Permits May Be Received From Any Licensed Clinic
However, restrictions will continue to apply to HIV certificates. According to Federal law No. 38-F3 ("On Prevention of the Spread of the Disease Caused by the Human Immunodeficiency Virus (HIV)") the authorities can insist that HIV certificates for work permits are issued only by state-run clinics.
2007 US Housing Exclusion Limitation
The IRS has also identified several locations within Russia with especially high housing costs, relative to average costs in the US. For Americans living in these specific locations, a higher exclusion is available.
AmCham's Annual Tax Seminar Presentations
PowerPoint files from AmCham's Annual Tax Seminar are now online. Alinga Consulting Group was a general sponsor of this important yearly event and was also featured among the presenters. Question on any subject within these presentations may be directed to Alinga's experts.
The Central Bank Loans Banks 100 Billion Rubles For Three Months To Pull Through Crisis
The last time the Bank of Russia cut the minimum reserve, from 7% to 3.5%, was during the height of banking crisis in 2004. Now the CB has lowered the rate by 1%, however the cut is effective for a limited term only.
Ministry of Finance Changes Its Position: No Further Reduction Of Taxes Is Currently Possible
Because government expenditures have been steadily rising of late (in spite of the Ministry’s efforts to control spending), any further reduction of taxes right now is “impossible.”
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