Preparation of 3-NDFL (Individual Income Tax) declarations for Russian Federation and foreign citizens

With regard to certain types of income from sources in the Russian Federation, tax is not withheld by the tax agent, so tax residents — citizens of the Russian Federation, foreign citizens, stateless persons — are required to submit to the tax inspectorate a declaration (3-NDFL (Individual Income Tax) related to such income. In particular, such sources of income include:

  • income from selling personal property in Russia;
  • income donated as property in Russia (in certain cases);
  • winnings from lotteries, totes, game machines and other games based on risk;
  • compensations received from individuals that are not tax agents, on the basis of concluded labour contracts or contracts of civil and legal nature, including income from employment contract or lease contract for any property;
  • income on which tax was not withheld by tax agents in respect of such income;
  • income received as remuneration paid to individuals as successors (heirs) of the authors of works of science, literature and art, as well as of authors of inventions, useful designs and industrial prototypes.

Tax residents of the Russian Federation, receiving income from sources outside of the Russian Federation, are also required independently to submit tax 3-NDFL (Individual Income Tax) declarations and to pay tax in relation to the following types of income:

  • dividends and interest received from a foreign organisation, with the exclusion of interest related to income from sources in the Russian Federation;
  • income received from the letting on lease or other use of property, located outside of the Russian Federation;
  • income from selling real estate, shares, other securities, or property, located outside of the Russian Federation;
  • remuneration for labour or other duties or works performed or services rendered outside of the Russian Federation;
  • other income received by a taxpayer as a result of his/her carrying out activities outside of the Russian Federation.

There are certain cases when citizens — tax residents of the Russian Federation — are not obliged to do so, but have the right to submit tax 3-NDFL (Individual Income Tax) declarations for the purpose of receiving tax deductions (i. e. to receive back from the budget a part of previously paid tax). the term of such a refund of overpaid paid tax is limited to three years. This means that taxpayers can submit a declaration with the declared deductions for refund of an appropriate tax sum within three years from the date of the corresponding tax payment.

Tax declarations must be submitted before 30 April of the year following the end of the calendar year in which the corresponding income was received. For those who submit a 3-NDFL (Individual Income Tax) declaration on their own initiative, the term of such a submission is not established.

If an individual fails to submit a tax 3-NDFL (Individual Income Tax) declaration within the established term, a fine may be imposed on him/her, in the amount of 5% of the tax subject to payment (additional payment) in accordance with such a declaration, for each full or part month starting from the date, established for the submission thereof, but not more than 30% of such sum and not less than 1,000 rubles.

Our experts will help you properly to execute and to submit a timely tax declaration, and will ensure that a tax, paid abroad, will not be subject to double payment, provided that there is an agreement on the avoidance of double taxation between the Russian Federation and such country.

Ekaterina Matveeva
Head of Financial Outsourcing Department


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