An individual is resident in Russia if physically present in Russia for more than 183 days in a calendar year. Any part of a day is treated as a day for these purposes. A resident individual is taxed on worldwide income.

A non resident is taxed on income from sources in Russia. Income from employment which is paid from an overseas bank account is currently not treated as Russian source.


A Russian resident's earned and unearned income and gains from all sources (subject to the allowances and exemptions described below) are taxed at progressive rates, as follows:

Taxable income (Roubles)      Tax Rate            Tax (Cum)

0  - 12 million                12 %                1.44 m
12 - 24 million                20 %                3.84 m
24 - 36 million                25 %                6.84 m
36 - 48 million                30 %               10.44 m
48 million +                   35 %               10.44 +  

Benefits in kind are treated as taxable income, including the provision of a car for private purposes, although the legislation does not provide how the value of these should be quantified. A loan by an employer to an employee is currently not taxable on the employee, but a profit is imputed to the employer.

Allowances and exemptions, deducted or excluded in arriving at taxable income include the following :


A monthly deduction of an amount equal to the monthly minimum wage (currently 75,900 roubles), is allowed for the taxpayer and registered dependents.


  • most social security benefits
  • pensions
  • compensation for labour injury within certain norms
  • statutory redundancy payments
  • expenses in carrying out employment duties, subject to modest limits
  • insurance benefits, other than through employer funded policies
  • interest on bank deposits with a Russian bank


  • amount expended (subject to a generous maximum) on the purchase or construction of a residence (or on repaying a bank loan for that purpose), over a period of up to three years;
  • amount paid to charitable or certain cultural, education or health organisations, within certain limits;
  • an allowance based on the monthly minimum wage in respect of each dependant;
  • the 1% pension fund contribution.


There is no special regime applying to expatriates, but the Russian tax consequences of items typical to the expatriate compensation package are set out in the table below.

Expatriates are normally paid in hard currency overseas. In calculating the Russian tax liability, the hard currency amount must be converted into roubles using the exchange rate applicable on the date the salary is paid.

Tax base in Russia

Local salary                                           100 %

Offshore salary                                        100 %

Foreign service allowance                              100 %

Hardship allowance                                     100 %

School fees                                            100 %

Travel costs home (taxpayer)                     not taxable

Travel costs home (taxpayer's family)                  100 %

Tax equalisation/protection payments                   100 %

Medical insurance paid by employer               not taxable

Relocation expenses reimbursed by employer             100 %
(in excess of fixed limits - rarely taxed 
in practice) 

Accommodation expense reimbursed by employer     not taxable

Expenses of business trips                       not taxable

Car for business purposes                        not taxable


Individuals are also potentially liable to property tax, land tax and inheritance and gift taxes.

For further information contact Bauke van der Meer on tel: +7 503 232 5511 fax: +7 503 232 5522 or e-mail directly: Click Contact Link or enter a text search 'Coopers & Lybrand' and 'Business Monitor'

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.