A tax resident is a subject of taxation. Its status is determined by the principle of residency (permanent residence), according to which all taxpayers are divided into persons who are residents and non-residents of the country. The assignment of a payer to one of the above categories determines its tax status and corresponding obligations (full or incomplete liability), as well as other differences in taxation (the procedure for depositing funds, declaring income, etc.)
The rules for determining residence differ for individuals and legal entities.
A tax resident is an individual who permanently resides in the Russian Federation. This applies equally to foreigners and stateless persons who are actually on its territory for at least 183 days during the year (this can be one or several periods).
Residence status in the Russian Federation is established annually. There are times when to determine it, only the criterion of temporary stay in the country is not enough. Then some additional features are used, such as the location of the permanent home, personal and economic ties, citizenship, etc. As a result of applying these criteria, which are established by the legislation of the Russian Federation and international agreements, the state where the person lives more is determined. Then the tax and financial authorities register him as a resident of his country.
A legal entity as a tax resident is determined on the basis of such tests as the incorporation test (depends on the country in which it is based), legal address, place of central control and management, place of current management of the company, business purpose.
Tax residents must make payments to the budget of the country to which they relate according to the status defined for them by law (TC). For each person (individual), this issue is crucial because it depends on which tax should be paid - 13% (for a resident) or 30% (for a non-resident), since the difference in the amount is quite significant.
To determine the status of citizenship does not matter. For this, a 12-month period is taken into account, which can begin in one calendar year and end in another. The 183-day period is calculated by adding the calendar days (including the day of arrival in and departure from Russia) for 12 consecutive months. The final taxpayer status can only be determined at the end of the calendar year.
The status of an individual “tax resident” has its own characteristics. Those who do not own them pay personal income tax only on income that they received only from sources in the Russian Federation. Their status is determined anew at each payment date. The return of excessively paid funds on personal income tax (if this happened) can be made only at the end of the period (calendar year) and only through the tax authorities (inspection). The rules on standard, property and social tax deductions do not apply to this category of payers .
The concept of “tax resident” of the year has slightly changed since 2007. If before that, persons who were on its territory for at least 183 days in a calendar year were recognized as residents of the Russian Federation , now only persons who have been this amount of time for 12 consecutive months are recognized as them. Such changes were made to close the “hole” in the law, because virtually all individuals on January 1 of each subsequent year lost their resident status
You can confirm your residency status with any document proving your stay in the Russian Federation for more than 183 days. This can be documents (passport) with a mark on entry into the Russian Federation, tickets, visas with marks, registration documents at the place of temporary residence.