Individual's tax status: resident or non-resident?

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The correct calculation of personal income tax (personal income tax) depends on the status of a citizen or a foreign citizen relative to the Russian Federation. The tax rate varies significantly depending on whether a person is a tax resident or a non-resident.

The tax status is determined based on the number of days spent in Russia during a calendar year. But a number of questions arise: which days are taken into account when calculating the length of stay in the country? How do business trips and short-term departures affect the final calculation of the period of stay? Is it possible to change the tax status during the year and how will this affect the amount of tax paid?

For some, understanding the criteria for determining tax status becomes a key factor in optimizing income tax expenses. This issue is especially relevant for those who run businesses in several countries at the same time, have dual citizenship, or work remotely outside their permanent place of residence.

We suggest discussing the criteria affecting the recognition of a person as a tax resident or non-resident, as well as the impact of a change in status on tax obligations.

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The calculation of personal income tax is a topic that invariably attracts the attention of Russians and foreigners living in our country. After all, the amount of withheld tax and the overall financial burden directly depend on the correct determination of your tax status.

According to Russian law, the concept of a tax resident is of key importance. The status is determined by the number of days of a person's physical presence on the territory of the Russian Federation during a calendar year. The applicable tax rate directly depends on the number of days a citizen has spent in Russia: for residents it is 13%, while for non—residents it is much higher, as much as 30%.

When determining tax status, important issues arise regarding the accounting of specific periods of stay in the country. So, which days are included in the general accounting? For example, are periods of short-term trips abroad or long business trips taken into account? And how does living in another country for less than six months affect general taxation?

Days taken into account when calculating the tax status

To begin with, we note that an individual is considered a tax resident of Russia if he is actually located on the territory of the country for at least 183 calendar days during twelve consecutive months. This means that if during the specified period a citizen stayed in Russia for more than half of the specified days, he receives resident status and pays personal income tax at a rate of 13%. And vice versa, if it is less, it becomes a non—resident taxable at an increased rate.

However, it is important to understand the specifics of calculating the period of stay.:
- Business trips and short field trips are taken into account in most cases, since the main condition is a permanent presence in Russia.
- Short-term trips outside the country are also included in the billing period if they are related to the performance of work duties or other temporary reasons.
- Long trips abroad lasting more than six months lead to the loss of resident status, which entails a change in the tax rate.

Change in tax status during the year

Sometimes the situation develops in such a way that initially a taxpayer could be considered a non-resident, but later circumstances change and he spends a lot of time in Russia. Then a logical question arises: is it possible to change the status of a tax resident within the reporting period and how will this affect the amount of tax?

Yes, a change of status is possible, and changes occur automatically when the required number of days of stay in Russia is reached. Thus, starting from the moment of acquiring the status of a resident, a citizen has the right to expect to apply a preferential rate of 13% for the entire subsequent period.

But there is a caveat: if the previously accrued tax was calculated at the non-resident rate (30%), the difference between these rates will have to be refunded independently by filing a declaration and recalculating the amounts paid. This procedure allows you to reduce the financial burden and optimize taxes.

The correct calculation of personal income tax depends on many factors, among which the key is the determination of tax status. Permanent residence in Russia guarantees a low level of taxation, while short-term residence will lead to a significant increase in the fiscal burden. A proper understanding of the specifics of calculating the length of stay in the country will allow you to effectively manage your financial obligations to the state.