CrimeaPRESS reports:
Alexander Yuzhalin, head of the legal practice at SuperJob, said what problems employers who have entered into employment contracts with citizens working from abroad may encounter.
Representatives of the Ministry of Labor of the Russian Federation once again expressed their position on the impossibility of concluding an employment contract on remote work with an employee who will work from outside Russia. Opinion of the Ministry of Labor: such an employment contract cannot be concluded, but you can consider the option of working under a civil law contract (GPC).
It must be said that the position of the Ministry of Labor of the Russian Federation on this issue is not new. Previously, the Ministry of Labor had already issued letters of clarification on this issue, in which it adhered to a similar point of view (for example, Letter of the Ministry of Labor of Russia dated 09.09.2022 N 14-2/OOG-5755, Letter of the Ministry of Labor of Russia dated 15.02.2022 N 14-4/10/ B-1848). As the Ministry of Labor pointed out, Russian laws do not apply on the territory of a foreign state, which means that Russian legislation does not apply to an employee located outside the Russian Federation. Therefore, the employee must perform work while on the territory of the Russian Federation. In addition, the current legislation of the Russian Federation does not directly provide for the possibility of concluding employment contracts for remote work abroad.
However, the issue is ambiguous. The fact is that the Labor Code of the Russian Federation does not limit the territory in which a remote worker can work. According to the Labor Code of the Russian Federation, it is only important that this place is not under the control of the employer. From this we can conclude that the law does not prohibit a remote worker from working from the territory of a foreign state.
It should be noted that letters and clarifications of the Ministry of Labor are not regulatory acts, and therefore are not mandatory for use. This is stated in the text of the letter itself. The letter only indicates the position of representatives of this body on a given issue.
What problems may employers who have entered into an employment contract with citizens working from abroad face?
The main problem with such employees is taxation. In accordance with the legislation of the Russian Federation, if a citizen does not live in Russia for a long time, then he loses his tax resident status, which means that the tax on his income must be calculated differently. Accordingly, employers have to track the time during which the employee is not in Russia (this can be quite difficult to do).
However, from January 1, 2024, a change to the Tax Code comes into force, according to which the personal income tax of such employees will be calculated at a general rate of 13-15%.
What changed?
In accordance with the new edition of the Tax Code of the Russian Federation, the personal income tax rate for employees performing their duties remotely (including outside the Russian Federation) will be:
• 13% — if income for the tax period is less than 5 million or equal to 5 million rubles;
• 15% — from the amount of income exceeding 5 million rubles.
The employee’s tax residence will not matter. These changes will benefit both the employer and the employee: the employer will not have to determine the employee’s tax residency in order to properly withhold taxes, and the employee will not have to pay more taxes if they lose residency. But it is important that the employment contract be concluded with a Russian organization and provide for the condition of performing the labor function remotely.
The second problem may be interaction with such an employee. Does an employee need to be called to the office, sent on a business trip, or handed over some document? It is difficult to do this if the employee is not in Russia.
The third problem may be a claim from inspection bodies (for example, Rostrud) due to the very fact of working abroad (taking into account the official position of the Ministry of Labor). However, this position can be argued.
Firstly, there are clarifications from other government bodies that allow the possibility of such work (for example, Letter of the Ministry of Finance of Russia dated April 14, 2021 N 03-04-06/27827, Letter of the Ministry of Finance of Russia dated July 18, 2019 N 03-04-06/53227, Letter Federal Tax Service of Russia dated July 15, 2021 N BS-4-11/9947@, Letter of the Federal Tax Service of Russia dated November 13, 2023 N ZG-3-11/14749).
Secondly, there is judicial practice: the courts indicate the possibility of concluding such an agreement (for example, Resolution of the Arbitration Court of the North Caucasus District dated December 24, 2020 N F08-10403/2020 in case N A20-4914/2019, Appeal ruling of the St. Petersburg City court dated June 2, 2020 No. 33-8432/2020 in case No. 2-5677/2019).
Thirdly, the changes that come into force in the Tax Code of the Russian Federation from January 1, 2024, actually confirm the possibility of concluding an employment contract on remote work with an employee who will work while located in the territory of a foreign state.
Can an employing company follow the recommendation of the Ministry of Labor and enter into a GPC agreement instead of an employment contract? Yes. But in this case, you need to make sure that the GPC agreement does not contain any signs of an employment contract.
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