Organizations Do Not Pay PIT For Staff In Foreign Branches
The Ministry of Finance has answered an official question that a certain organization must act as the tax agent and pay PIT for employees that work at its Libyan branch if the branch had been created and registered by the organization in Libya. This concerns Russian citizens who work in foreign branches as their primary place of business according to their employment contracts. This is according to Letter #03-04-06/6-80 dated April 21, 2010.
The Letter notes that if the employment contract specifies that a staff member’s workplace is in a foreign country, or if individuals operate and render services in a foreign country as stipulated in a civil law contract, the compensation received by these individuals is not treated as income from a Russian source.
Thus, the employer does not act as the tax agent when its employees’ income is received from a source outside of Russia
Translated by Alinga Consulting Group.
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