Tax registration requirement for foreign citizens in Moscow

Foreign citizens who reside in Moscow and whose income is taxable in Russia (please click here to view our Alert on personal income tax rules) starting from 1 January 2015 will need (if required) to file their annual income tax returns with the tax inspectorate of their place of registration/residence, instead of with the Federal Tax Service Inspectorate No. 47 (“Tax Inspectorate No. 47”). This requirement will apply to foreign citizens in respect of their income received after 1 January 2014. Any foreign citizen who does not already have a Russian Taxpayer Identification Number (“INN”) first should obtain one from their local tax inspectorate.

For many years, the Tax Inspectorate No. 47 was responsible for the tax registration of both foreign individuals and organisations registered in Moscow. As a result of the recent reallocation of competencies in relation to foreign organisations, the Tax Inspectorate No. 47 will now only deal with the tax registration of foreign organisations and the accreditation of their representative offices and branches located in Moscow (as we previously reported – please click here to view).

This change in the tax registration rules with regard to foreign citizens residing in Moscow brings the regime applicable to Moscow into line with that in force in the rest of the country since 2010.

The new territorial filing requirement applies to foreign citizens irrespective of their migration status, namely whether they hold an ordinary work permit, temporary/permanent residence permit or indeed whether they benefit from highly qualified specialist status.

Any foreign citizen who needs to file a personal income tax return in Russia should, in addition to making sure that they submit it to the tax inspectorate of their place of registration/residence, first check that they have been issued with an INN. If they do not state their INN on their tax return, in practice they may well face difficulties when submitting their tax return to their local tax inspectorate. Even though there is no legal requirement to state the INN in personal tax returns, local tax authorities normally require individuals to do so in practice.

Obtaining an INN is not usually problematic, as the application process is quite straightforward. However, applicants should bear in mind that (i) some of the documents they need to submit in support of their application need to be certified by a Russian notary and (ii) the legal deadline within which tax authorities issue INN certificates is five working days from the submission of a full application. With tax returns in respect of income earned in 2014 being due by 30 April 2015, there is no time to waste.