How can you confirm your status as a tax resident of the Russian Federation?

Certificate of tax residence

A certificate of tax residency of both a legal entity and an individual is documentary evidence of the fact that this person has the status of a tax resident of the Russian Federation. The official name of such a certificate is “Confirmation of permanent residence in the Russian Federation.”

Important! A resident, in turn, is understood as a legal or natural person registered in a specific location in a specific country, for example, a resident of the Russian Federation.

This status is necessary for certainty in the payment of taxes to the budget of a particular state. At the same time, when determining the status of an individual, his stay in the Russian Federation for 183 days over a consecutive 12 month period . This period will not be interrupted if the person stays outside the Russian Federation for less than 6 months for the purpose of treatment, training, work or provision of certain services (

Who are tax residents

These are legal entities and individuals who are required to pay tax on income received in Russia. These include:

• companies registered on the territory of the Russian Federation;
• foreign companies that are required to pay tax according to the provisions of an international treaty;
• companies whose management body is located in Russia.

The following rule applies to individuals: residents are those who spend 183 calendar days throughout the year on Russian territory. Short trips for study or training purposes are not taken into account.

If the employee is a non-resident, then the employer must correctly calculate the personal income tax (the amount will be increased). In addition, such an employee cannot take advantage of child and property deductions.

The determination of the status of an individual for calculating personal income tax is described in Letter of the Ministry of Finance dated February 15, 2017 No. 03-04-05/8334.

Normative base

The procedure for confirming tax residence status was approved by order of the Federal Tax Service of Russia No. ММВ-7-17 / [email protected] dated 07.11.2017. The same order approved the application form for obtaining status, as well as methods for submitting it to the tax authority. A resident document is issued by the Federal Tax Service of the Russian Federation or an authorized territorial tax authority . Let us remind you that until the end of 2021 it was possible to obtain a certificate only in one place - MI Federal Tax Service for Data Center (Interregional Inspectorate of the Federal Tax Service for Centralized Data Processing).

When will tax authorities begin issuing certificates of Russian resident status for 2021?

A document confirming the status of a tax resident of the Russian Federation is issued for the current year no earlier than July 3. The Federal Tax Service of the Russian Federation reports this in its letter dated February 27, 2020 No. VD-3-17/ [email protected]

The Agency reminds that tax residents are individuals who are actually in the Russian Federation for at least 183 calendar days over the next 12 consecutive months. At the same time, the period of stay in Russia is not interrupted by periods of short-term travel abroad (less than 6 months) for treatment or training, as well as to perform labor or other duties related to work in offshore hydrocarbon fields.

Establishing the fact that an individual has tax resident status is carried out primarily for the purposes of calculating and paying personal income tax.

A document confirming the status of a tax resident of the Russian Federation is issued for one calendar year. The form of the document was approved by order of the Federal Tax Service dated November 7, 2017 No. ММВ-7-17/ [email protected] (with amendments and additions).

Since confirmation of tax resident status can be made subject to staying in Russia for at least 183 calendar days per year, a document confirming tax status can be issued for the current year no earlier than July 3. Accordingly, to confirm the tax status of a resident in 2021, a document can be obtained from the tax authority no earlier than July 3, 2021.

In this case, taking into account the 12-month period is necessary only to determine the rate of personal income tax withheld by the tax agent until the expiration of the current tax period.

BUKHPROSVET

A document confirming the status of a tax resident of the Russian Federation is issued to organizations and individuals based on an application and documents confirming this status. Such a document can be issued for each source of income and property. At the same time, the period for consideration of an application for the issuance of a document confirming tax status depends on the method of sending this application to the Federal Tax Service.

If an application is submitted electronically through the official website of the Federal Tax Service, the period for consideration of the application is 10 calendar days. If an application is submitted in person or by mail, the period for consideration of the application is 20 calendar days from the date of its receipt by the inspectorate.

A document confirming tax resident status is issued for the year preceding the date of submission of the application, for the current calendar year or for previous calendar years. A document confirming tax resident status is sent to the taxpayer or his representative on paper by mail or in electronic form through the official website of the Federal Tax Service of the Russian Federation.

Why do you need a tax residence certificate?

Important! Typically, a tax residence certificate is required in cases where a person (legal or individual) begins any cooperation with foreign companies.

For an individual, this certificate will serve as a basis for avoiding double taxation. And for legal entities, a certificate is needed when working with organizations from other countries. Thus, confirmation of status and receipt of a certificate will be required in the following cases:

1. When a Russian company provides services to a foreign company (sale of goods). In this case, in order to avoid double taxation, the foreign company requests confirmation of its status from the Russian organization.
2. In case of provision of services to a foreign company by an individual entrepreneur or an individual. In order to avoid double taxation, a foreign company requests this certificate from an individual.
3. When a Russian organization or individual receives income from participation in the activities of a foreign company (the participant receives income in the form of dividends).
4. For submission to a foreign authority upon appropriate request.

Tax residence for foreign citizens

Both a citizen of Russia and a subject of another country who, for example, has received a work visa, have the right to receive NR status. The main condition is to stay in the country for 183 days over 12 months. The 183-day rule also applies to foreigners who became subjects of the Russian Federation within 3 months using a simplified scheme for obtaining citizenship. On the 184th day, the Federal Tax Service inspector must recalculate the rate for the current period. A “center of vital interests” will help to facilitate the acquisition of residence, implying the residence of family members, the location of an enterprise or own business in the Russian Federation.

A residence permit cannot be used as proof of residence status, because it only gives the opportunity to stay in the country, but does not apply to documents guaranteeing permanent presence in it.

Russia has entered into formal agreements with many countries to prevent double taxation. Considering the fact that the Russian taxation system is more flexible and democratic than, for example, in many European countries, citizens of foreign countries prefer to become a RF NR.

Eurasian Economic Union

At the beginning of 2015, the agreement concluded between Russia and the Republics of Belarus, Armenia and Kazakhstan gained legal force. According to one of its paragraphs, from the 1st day of labor activity, a rate of 13% should be applied to residents of these countries employed in the Russian Federation.

In the foreseeable future, this rule will apply to citizens of the Kyrgyz Republic.

Apostille on the certificate

It is important to remember that a residence certificate is always intended for other countries, which means that in order to understand the contents of such a document, it must be drawn up in an understandable language. For this purpose, an apostille is affixed to the certificate. It is affixed to a copy of the certificate, which is certified by a notary, but only if the country for which this certificate is intended is a party to the Hague Convention . Otherwise, the apostille will not be affixed, but a legalization procedure will be required.

Procedure for obtaining a tax residence certificate

Until recently, there was no special application form that companies, individual entrepreneurs and other individuals had to submit to the tax authority. It had to be compiled in free form. But from December 9, 2021, the application must be submitted in a form approved by the Federal Tax Service (KND 1111048). The application contains the following information:

• name of the organization (if the application is submitted by an individual or individual entrepreneur, then his full name);
• periods of time for which the applicant needs a certificate (for example, for the past year or several years);
• the reason for issuing the certificate (required in the case of application of bilateral international treaties or for other purposes);
• duration of stay of an individual entrepreneur or other individual in the Russian Federation;
• the grounds on which a person (legal or individual) can be considered a tax resident of the Russian Federation;
• information about the identity document (indicated if there is no TIN).

How to confirm the status of a tax resident of the Russian Federation for personal income tax payment

Speaking about how one can confirm the status of a tax resident of the Russian Federation, it should also be noted that not only the rate of tax on personal income, in accordance with Art. 224 of the Tax Code of the Russian Federation, depends on the tax status of the taxpayer. Tax status also determines the application of personal income tax to income received from certain sources and exemption from taxation in certain cases (Article 209 and Clause 17.1 of Article 217 of the Tax Code of the Russian Federation).

Tax status is not a constant. It is determined by the citizen’s tax agent, including the employer or bank, as well as other persons, depending on the income received for each date he receives income, depending on the time actually spent in the country. The final tax status of a person is determined based on the results of the past tax period, which, in accordance with Art. 216 of the Tax Code of the Russian Federation, the year is recognized.

Thus, until the tax period has ended, each time an individual receives income, his tax agent must independently determine the person’s tax status. There is no officially approved procedure for confirming the time actually spent on the territory of the Russian Federation in the tax legislation of the Russian Federation, therefore tax agents obtain the necessary information independently, if necessary, requesting the required documents from the citizen. That is, in each situation where a person receives income, his tax agent independently determines his tax status.

The procedure for filling out an application by individuals

Individual entrepreneurs and other individuals must fill out the following sections in the application:

1. A title page on which the full name, TIN, years (for which a certificate is required), as well as methods for obtaining the document are indicated. If an individual does not have a TIN, he will additionally need to fill out 1 section on page 002. In this section, you will need to indicate the details of an identity document (passport, birth certificate, military ID, etc.).
2. Data on the length of stay of an individual in the Russian Federation (fill out section 2 of page 002).

What documents are attached to the application?

When submitting a tax application for a certificate, you will need to attach the following documents to it:

• an agreement/contract that will confirm the receipt (the right to receive) income from a foreign company;
• documents confirming ownership of property;
• a document establishing the payment of dividends in a foreign company (for example, a decision of company participants to pay dividends);
• copies of payment slips (cash receipts) confirming the payment of dividends;
• accounting certificates;
• other primary documents.

Important! In some cases, copies of documents confirming the person’s presence in the Russian Federation during the period of time for which the certificate is required are attached to the application of an individual entrepreneur or other individual.

If the documents attached to the application are drawn up in a foreign language, then they should be translated into Russian and the translation certified by a notary.

How to submit an application to the tax office

An application for a residence certificate and the accompanying package of documents can be sent to the tax office in one of the following ways:

• by personally contacting the tax authority;
• send documents by registered mail with a list of attachments;
• via the Internet through the tax website.

Important! As a method of receiving a completed certificate, an organization or individual can also choose one of the following methods: in person, by mail or via the Internet.

Supporting documents

The Tax Code of the Russian Federation does not dictate a list of documents with the help of which it is possible to confirm the location of subjects in the country. All responsibility for tax withholding, which implies not only correct calculation, but also determination of tax status, falls on the shoulders of the tax agent, which can be the employer.

As a rule, tax officials ask to provide any documents that will help to correctly determine residence

They have the right to request the following documents as proof of stay in the country:

• certificate of temporary registration;
• table for calculating the length of stay in the country;
• certificate from the employer;
• time sheet;
• copies of travel documents and all pages of the international passport.

Practice shows that such confirmation is rarely required. As a rule, the preparation of this package of documents is necessary in order to prevent double taxation. If you need a certificate indicating information about the taxpayer’s status, you should request it from the Interregional Inspectorate of the Federal Tax Service for Centralized Data Processing.

To request a document from the Federal Tax Service confirming your tax resident status, you need to submit an application. This can be done in person or by mail ().

Confirmation of tax resident status online

In 2021, tax resident status can be confirmed online by going to the Tax Service website. The website offers a special service “Confirmation of tax resident status of the Russian Federation”, which can be used by individuals and legal entities. This service allows both organizations and individuals to quickly fill out an application and send it to the tax office, as well as receive the necessary document in PDF format, or a refusal to issue it. One of the advantages of this service is that you do not need to send additional supporting documents to the tax office. It will be sufficient to simply formulate an application. Moreover, if a residence certificate is needed on paper, then the corresponding note should be made when filling out the application, that is, “Submit the document on paper.” Using the service, the applicant can also monitor the processing status of his application at the tax authority. It should be remembered that the period for reviewing the document in this case does not change and is also 40 calendar days. In addition, tax agents and foreign authorities can also check a person's tax resident status online. They can also use the service presented on the tax website. Moreover, any interested person can do this and there is no need for special registration or entering any codes.

Features and benefits of the new service

The service in question will help ordinary individuals, merchants and organizations quickly:

• form an application (i.e. fill out, register and send to the tax office);
• receive a document in PDF format confirming the status of a Russian tax resident (or refusal):

It is important that a potential tax resident is not required to send additional supporting documents through this service. Just a statement is enough.

To receive a document on tax residence of the Russian Federation on paper, when creating an application, you must make the note “Send the document on paper.”

In addition, the service allows you to track in real time the status of processing and consideration of an application from the moment it is registered with the Tax Service of Russia. The period for its consideration is up to 40 calendar days.

It is expected that all this will significantly simplify the procedure for taxpayers to confirm their tax status.