The Ministry of Finance of Russia proposes to carry out an experience on providing the right to a special tax regime – Tax on Professional Income (TPI) – to persons being citizens of the CIS member nations, which are not members of the Eurasian Economic Union (EUEU), according to Izvestiya.
If such a decision is made, resident of Azerbaijan, Moldova, Tajikistan and Uzbekistan will be able to use this special tax regime.
Labor migrants from these countries will be able to work in Russia legally and not pay 4,000 rubles per month for work patent, experts say. This, in turn, will allow attracting more foreign citizens to Russia that will help solve the problem of manpower deficit.
Under the new law, self-employed Russians will be subject to a 4 percent tax on their income, while those who provide services to companies or individual entrepreneurs will be charged 6 percent.
The number of self-employed in Russia is difficult to calculate: various sources cite 16 million people (the Ministry of Labor of Russia), 25 million (Rosstat) and up to 40 million (experts).
For such individuals and their families, their activities are often the only source of income.
The need to determine the legal status of self-employed was noted in 2016 at a meeting of the Presidential Council for Strategic Development and Priority Projects, in the Presidential Address to the Federal Assembly that same year, and in May 2018 activities of self-employed citizens was set as one of the components of the strategic development objectives.
To create such conditions for the activity of self-employed citizens, from January 1, 2019, an experiment is being conducted on the territory of four constituent entities of the Russian Federation: in Moscow, Moscow and Kaluga regions, and in the Republic of Tatarstan. It introduces a special tax regime: “Tax on Professional Income” (TPI).
Among the tasks to be addressed by the relevant federal law are automation of document flow between citizens and tax authorities, the release of the self-employed from the obligation to submit tax reports, as well as the introduction of a unified payment from proceeds, including tax and insurance premiums on CMI (Compulsory Medical Insurance).
Citizens of the Russian Federation, foreign citizens, and also stateless persons, will be able to switch to the special tax regime, subject to the following conditions: 1) activities are conducted on the territory of any of the four subjects of the Russian Federation included in the experiment. (when carrying out activities on the territory of several such regions at once, an individual chooses one of them independently and has the right to change his choice, but not more than once a calendar year); 2) lack of an employer (at the same time, the special tax regime can be combined with work under an employment contract, for example, working in a company and renting housing. Income from work will be taxed according to the general rules (personal income tax of 13%) and you will additionally need to pay TPI on rent); 3) absence of employees under employment contracts (however, this rule does not prohibit the use of assistants, as well as entering into civil contracts); 4) receiving income from the use of property located on the territory of the subjects of the Russian Federation included in the experiment; 5) and annual income does not exceed the threshold value of 2.4 million rubles..
The pilot project imposes restrictions on certain types of activities in which individuals cannot be payers of TPI: sale of excisable goods and goods subject to mandatory labeling; resale of goods and property rights (except for property used for personal, household and other similar needs); mining or sale of minerals; delivery services (except when there is a cash desk and a seller’s receipt is issued to the customer); and business activities on the basis of contracts of proxy, commission or agency contracts.
Also, state and municipal employees are not entitled to apply the special tax regime (except when they rent out residential premises). .
It is not allowed to combine TPI with other special tax regimes.
