Russia now attracts Western millionaires with its flat 13 per cent income tax rate and only 9 per cent taxation of dividends. One of the first wealthy western persons to enjoy this Russian flat-tax miracle is the millionaire French actor Gerard Depardieu who was granted Russian citizenship by the Russian President Vladimir Putin.
The popular “Green Card” and “Cyrano de Bergerac” movie star has been looking for a new citizenship to escape a 75 per cent “millionaire’s tax” planned by France’s Socialist President Francois Hollande. Kremlin hopes that low income tax in Russia, which already ranks seventh in millionaires, will attract a “massive migration of rich Europeans” to this former “Evil Empire”. Today millionaires’ and billionaires’ incomes are the least taxable in Russia, providing that they mostly come from dividends received from shareholdings. (Photo Credit: Georges Biard/Wikipedia)
Tax in Russia
Russian residents’ personal income flat tax rate is only 13 per cent. There is no joint filing.
Tax on employment income is withheld by the employer and remitted to the tax authorities. Normally employers do not need to file a tax return if they do not want to claim a refund for any deductions, such as home purchase, education or medical expenses. Tax returns are mandatory only for registered entrepreneurs and professionals, or sellers of personal assets. Capital gains from such sales are taxable only if the seller owned the asset for less than 3 years. State pensions and alimony are usually not taxable, as well as the bank interest.
Dividends received by a Russian entity from both Russian and foreign entities are generally subject to tax at only 9 per cent, thus putting Russian moneybagses in a privileged position. Double taxation of dividends is completely eliminated when a Russian shareholder owns at least 50 percent of Russian or foreign subsidiary paying for at least one year, and the investment is worth more than 16.5 million dollars.
Other Taxes in Russia on Individuals
Taxes in Russia differ a lot from the US taxes.
The stamp duty is usually nominal, the real property tax is imposed at rates up to 1.5% of the very low cadastral value per annum. There are no Capital acquisitions, Capital duty, Inheritance, and Net wealth taxes. (Photo Credit: StockMonkeys.com)