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Foreign Income of persons: Peculiarities of Taxation

Foreign Income of persons: Peculiarities of Taxation

Tax residents of the RF are obliged to pay personal income tax (PIT) on foreign income. At the same time, these incomes are subject to PIT in the country of source.


To eliminate double taxation, the Russian Federation has signed international agreements with the majority of countries.

According to these agreements:

·  Such incomes as salary and dividends are generally subject to personal income tax only in the country of source;

·  PIT on property income and securities paid in one country is subject to set-off in the other one;

·  The possibility of setting-off other types of income depends on a specific bilateral agreement. 

In order to set-off the amount of foreign PIT in Russian Federation, it is necessary to:

• Submit a declaration of income (3-NDFL) with indication of foreign income

• Provide documents confirming the payment of tax in a foreign country 

Non-residents who received income in the Russian Federation should carry out similar actions in their native countries.