Since 01.01.2024, payments when an employee performs labor functions remotely under a contract with an employer that is a Russian organization or with a separate subdivision of a foreign organization registered in the territory of the Russian Federation, is recognized as income from sources in the Russian Federation [1]. Such income is subject to personal income tax at the rate of 13% (15% for payments exceeding 5 million rubles per year).

An exception is payments under an employment contract concluded for the performance of labour activities in a separate subdivision of a Russian organization registered outside the Russian Federation. Such payments will, as before, be recognized as income from sources outside the Russian Federation.

Thus, from 01.01.2024 the uncertainty as to how payments to remote employees actually working outside the Russian Federation are subject to personal income tax is eliminated.

If employment contracts do not establish the place of work of employees in a separate subdivision of a Russian organization in another state, a Russian organization or a Russian separate subdivision of a foreign organization as a tax agent will be obliged to withhold personal income tax on remuneration paid to remote workers (unless otherwise provided for by an international agreement of the Russian Federation on avoidance of double taxation). It does not matter whether the remote worker is a tax resident of the Russian Federation or not.

In addition, starting from 01.01.2024, reimbursement of expenses of a remote worker related to the use of equipment, software and hardware, information security and other means owned or leased by him/her to perform labor functions, in the amount determined by a collective agreement, local normative act, labor contract, additional agreement to the labor contract, is not subject to personal income tax in the amount not exceeding 35 rubles for each day of performing labor functions remotely, or in the amount actually incurred by the employee [2].


[1] Subp. 6.2 p. 1 of Art. 208 of the Tax Code of the Russian Federation in the edition of the Federal Law of 31.07.2023 N 389-FZ.

[2] P. 1 Art. 217 of the Tax Code of the Russian Federation in the edition of the Federal Law of 31.07.2023 N 389-FZ