Russia, Kazakhstan to hold talks on remote work tax disputes

Russia and Kazakhstan are set to hold consultations “very soon” to resolve issues of double taxation affecting remote workers, Deputy Head of the Federal Tax Service (FTS) Yulia Shepeleva said.

She emphasized that the problem is not widespread, Caliber.Az reports, citing Russian media.

Earlier this summer, reports emerged that Russians working for Kazakh employers were subject to double taxation. The FTS reportedly sent notices to affected individuals, requiring them to pay Personal Income Tax (PIT) in Russia, even though their earnings had already been taxed in Kazakhstan.

“There is an agreement between Russia and Kazakhstan on the avoidance of double taxation,” Shepeleva said. The pact stipulates that the income of a Russian tax resident working remotely for a Kazakh employer should be taxed only in Russia. Tax withholding in Kazakhstan is permitted if a certificate of tax residency is not provided, if the work was physically performed in Kazakhstan, or if local regulations require initial withholding followed by a refund.

In cases of excessive tax withholding, Shepeleva advised individuals to apply for a refund in the country where the tax was collected. If refunds are denied, a mutual agreement procedure can be invoked, whereby the competent authorities of both countries hold consultations. In Russia, this role falls to the Ministry of Finance.

By Vafa Guliyeva