There are cases when organizations employ specialists with dual citizenship one of which is the Russian one. The question is how Highly Qualified Specialists’ earnings shall be taxed in this case.
Within the letter № 03-04-06/0-160 as of 27 July, 2010, the Ministry of Finance clarified the taxation rates question of Highly Qualified Specialists with dual citizenship (including RF one).
The tax rate for incomes of nonresidents (individuals) in Russia is 30% (paragraph 3, article 224 Tax Code). There are some exceptions. According to part 4, paragraph 3, article 224 of the Tax Code, 13% tax rate is applied to the earning of Highly Qualified Specialists – who are foreign citizens. In Russian legal practice the term “foreign citizen” is considered as an individual who has the proof of one of the citizenships and is not the citizen of Russia (article 2 of the Federal Law №115 of 25 July, 2002). An individual with the dual citizenship, one of which is a Russian one is not considered as “foreign citizen” in this connection the part 4, paragraph 3, article 224 of the Tax Code does not apply to him, thus the tax rate for income of Highly Qualified Specialists (nonresidents) with dual citizenship (including RF one) is 30 %.
For more information please contact consultants of Confidence Group.
