Japan is one of the most economically and technologically advanced countries in the world. However, the internal structure and functioning of this state as a whole are noticeably different from other countries, whose economies are developing no less successfully. Japan's form of government is a constitutional monarchy. Moreover, the state is divided into 47 prefectures and has about 2,000 municipalities. In this article we will talk about how the Japanese tax system is structured and works.
The Japanese tax system, like the US and Europe, is characterized by multiple taxes. Each territorial government body has the right to collect them. But all taxes in the country are fixed in legislative acts. Each type of government tax is regulated by law. The law on local taxes determines their types and marginal rates, otherwise the establishment is carried out by the local parliament. There are 25 state and 30 local taxes in the country. They can be classified into three large groups:
- The first is direct income taxes on legal entities and individuals.
- The second is direct property taxes.
- The third is direct and indirect consumption taxes.
There are 25 state and 30 local taxes in Japan. They can be divided into three large groups: direct income taxes on individuals and legal entities, direct property taxes, direct and indirect consumer taxes.
In Japan, there are three types of local taxes levied by municipalities:
- Entrepreneurial;
- corporate municipal;
- equalization tax.
Another peculiarity is that the financial year and tax period in Japan ends in March, and a new one begins in April.
Let's take a closer look at some types of taxes.
Income tax is paid by individuals recognized as permanent and temporary residents of Japan, as well as by non-tax residents, on income received from sources in Japan.
All rates are differentiated by the amount of income received by citizens and fluctuate in the range:
- national - from 10% to 50%;
- prefectural - from 2% to 4%;
- municipal - from 3% to 12%.
The Japanese fiscal year ends in March, so this table was compiled in April 2015. We see that taxes have been implemented at 86.6% of the plan. Of these, they “exceeded” the plan by 5% of income tax receipts. Inheritance tax revenues increased by 2% of what was planned; this is directly related to the introduction of a new inheritance tax system. In general, the plan has been completed by 90% for certain types of taxes.
Information on the amount of taxes and fees (April, 2015) (in millions of yen, %)
| Taxes | Planned amount | April | April (consolidated) | Implementation |
| Income tax | 15 817 000 | 2 403 191 | 16 715 648 | 105,7 |
| Corporate tax | 10 513 000 | 396 456 | 6 553 798 | 62,3 |
| Inheritance tax | 1 748 000 | 109 206 | 1 786 129 | 102,2 |
| Consumption tax | 15 339 000 | 1 792 122 | 11 903 652 | 77,6 |
| Alcohol tax | 1 341 000 | 88 316 | 1 222 792 | 91,2 |
| Tobacco tax | 922 000 | 76 714 | 918 628 | 99,6 |
| Gasoline tax | 2 545 000 | 203 426 | 2 296 150 | 90,2 |
| Liquefied gas tax | 10 000 | 745 | 8 952 | 89,5 |
| Aviation fuel tax | 53 000 | 4 298 | 52 090 | 98,3 |
| Oil and coal tax | 613 000 | 62 464 | 582 975 | 95,1 |
| Energy Resources Development Tax | 327 000 | 27 473 | 321 069 | 98,1 |
| Tax on the carrying capacity of water vehicles | 387 000 | 0 | 372 773 | 96,3 |
| Customs duty | 1 045 000 | 52 119 | 1 029 361 | 98,5 |
| Ship (tonnage) tax | 10 000 | 14 | 9 988 | 99,9 |
| Other | — | 0 | 19 | — |
| Revenue from fees | 1 056 000 | 5 218 | 1 034 916 | 98,0 |
| total amount | 51 726 000 | 5 131 762 | 44 808 940 | 86,6 |
What tax authorities operate in Japan?
Despite the fact that Japan is a unitary state, the country has well-developed local government with significant powers, including in terms of introducing and collecting various taxes. In fact, tax revenues to the central and local budgets are approximately equal: the ratio of funds collected is approximately 53 to 47% in favor of the central budget. The peculiarities of the Japanese tax system led to the formation of a two-tier system of tax authorities.
Features of the government system
Japan is a unitary state divided into 47 prefectures and about 2,000 municipalities. Each prefecture is headed by a prefect, who has his own legislative and administrative apparatus. Despite the fact that Japan is a unitary state, there is a long tradition of local government autonomy. In 1947, the country adopted a Constitution that established the principles of local self-government.
Local authorities had great powers; in particular, they could set taxes independently and were not limited in their own rule-making. However, if local authorities intend to introduce a new tax that is not provided for by law, they must obtain approval from the Minister of the Interior. A new tax cannot be imposed if it violates the basic requirements. The tax system in Japan is characterized by a small tax burden and broad tax opportunities for local authorities.
National level
At the national level, taxation in the country is the responsibility of the Ministry of Finance. Its structure includes two divisions: the Tax Bureau and the Bureau of Customs Duties and Tariffs. These divisions deal primarily with issues of planning the state's tax policy. The implementation of this policy is directly carried out by the National Tax Administration (NTA), which is also part of the country's Ministry of Finance. NNU is a very powerful organization with 56,466 employees distributed among the central office, 12 regional tax bureaus, the Okinawa Regional Tax Office and 524 tax offices. In addition, NNU has its own college and the National Tax Tribunal, where incorrect assessments of fees can be appealed. It is this organization that carries out tax control in Japan.
All structural divisions of NNU are divided into three departments:
- Taxation department.
- Tax collection department.
- Department responsible for inspections and investigations in cases related to tax evasion.
The last department is in charge of practical work on identifying violations in the tax sphere and suppressing them. To this end, it includes units for audit, investigation and international cooperation in the fight against tax violations. When preparing legislative changes in the field of taxation, the State Tax Commission under the Prime Minister, a similar commission of the ruling Liberal Democratic Party and the Headquarters for Structural Reforms, headed by the Prime Minister of the country, closely cooperate.
Tax tightening and tax incentives in Japan are the responsibility of these three organizations. In the field of fundraising, the main organization is the Ministry of Finance. Each type of fees in the Land of the Rising Sun is regulated by a separate law. It should be noted that the laws in this area are very voluminous and difficult for non-professionals to understand, which is why the country has an institute of authorized tax consultants. These are licensed professionals who, for a fee, prepare and file most of the country's tax reporting documents. Authorized collection consultants serve both individuals and businesses.
Privileges
Japan also has a preferential tax system. You can get a tax discount for various reasons:
- To make taxation fair for different categories of citizens, the state introduced a special discount that reduces taxable income. This discount can be used by hired workers who sell their labor. The discount is equal to the amount of personal expenses.
- Business income can be divided according to tax purposes. When filling out a declaration, it is allowed to deduct the cost of preparing the declaration from income, but not more than 100 thousand yen.
- Income such as the difference in rent for government-provided housing can be received by working people or entrepreneurs.
- In Japan, families are encouraged in which two spouses work and earn approximately the same income. If someone works alone, the family bears a heavier tax burden.
Local level
The relationship between central and local authorities in the financial sector is determined by special laws. Despite the constant growth in local collections, they are not enough to finance all local needs, so part of the costs is financed from the central budget.
To cover the imbalance between the needs and capabilities of local budgets, tax revenues are redistributed. Thus, the regions receive 32% each from income tax, alcohol tax and tax on legal entities. The state transfers 25% of the tobacco tax to the regions, and 24% of the consumption tax. In contrast to targeted subsidies and subsidies, local authorities use the received tax shares at their own discretion. In addition, there is a system of “assigned taxes”, where special national taxes, for example on the maintenance of the road network, are transferred to local authorities. Taxation in Japan is organized in such a way that in the structure of citizens' expenses, taxes rarely exceed 20%.
For developed countries this is a fairly low level. Moreover, when there is a shortage of funds, the government prefers to borrow rather than raise taxes for its citizens. For this reason, Japan's public debt is about 200% of its annual GDP.
There are local taxes:
- For hotel accommodation and use of public catering establishments. Thus, if the cost per person for one night exceeds 10 thousand yen or if the cost per person for one visit to a restaurant exceeds 5 thousand yen, a tax of 3% is charged.
- A tax of 150 yen per person is charged for one day of hot springs, and 800 yen per person for one day of use of the golf course. These taxes are in addition to the regular 3% consumption tax.
- The owner of a car is forced to pay a whole lot of taxes: 3% consumer tax on the purchase and tax on the purchase of the car, taxes on gasoline, tax on the car itself and on its weight.
Fine for non-payment
The modern Tax Code of the Russian Federation establishes objects of taxation and payers, that is, residents and, accordingly, non-residents. This suggests that the level of responsibility for violating the rules applies to everyone who profits from the property.
Due to the fact that the head of the enterprise who hired the foreigner acts as his tax agent, he must perform the required functions. Taxes are transferred on income received. Fines imposed for violations in this area are paid accordingly.
If a citizen who is considered a non-resident has not registered his income and transferred it to the treasury, he will be subject to financial and administrative responsibility. In particularly serious cases, criminal liability will be imposed. Trying to avoid punishment by leaving Russia will not bring the desired result.
Tax debts are strictly verified and regulated by law. Russia has concluded many official agreements with other states. They are aimed at assisting in international fiscal as well as standard administrative proceedings. Such treaties and agreements regulate issues directly related to double tax deductions.
Business taxes
Japan's corporate tax, coupled with personal income tax, provides about 70% of government revenue. All international corporations making profits in Japan are required to pay taxes in that country.
In particular, the following are subject to taxation:
- Interest income from government and corporate securities.
- Interest accrued on loans issued to entities carrying out economic activities in the country.
- Dividends from shares.
- Consideration for the use of movable and immovable property.
- All types of remuneration (salaries, bonuses, etc.) for the provision of services in the country.
- Pensions and severance pay.
- Income from the transfer of copyright and patent rights.
- Income from rental of equipment and machinery.
- Income from advertising activities.
- Profit from redemption of Japanese bonds.
- Profit distribution.
- Income from business activities.
All of these incomes are considered profit, and this is not a complete list. Income tax in Japan, depending on the volume of taxable profit, can range from 22 to 30% for local companies, and from 29.33 to 40.87% for foreign legal entities.
For what income does the 13% rate remain?
Pensions in Japan: terms of assignment, types of pensions, size
There are three types of income for which the combined rate of “650 thousand rubles” + 15%" does not apply regardless of the payment amount. These include:
- income from the sale of real estate (except for securities) or shares in it;
- income in the form of the value of property (except for securities) received as a gift;
- taxable insurance payments under insurance contracts and pension payments.
An important detail: the personal income tax rate of 13%, which does not depend on the amount of the specified income, is provided only for residents of the Russian Federation. This is stated in the new paragraph 1.1 of Article of the Tax Code of the Russian Federation.
Reward system
Japan has a fairly well-developed system of encouraging both national and foreign investment, the main goals of which can be reduced to creating favorable conditions for the further development of structural restructuring carried out within the national economy, as well as to accelerate economic growth in relatively less developed regions of the country. For foreign business activities in Japan, the most important system is to encourage investment in the peripheral regions of the country. Many foreign entrepreneurs with significant experience in the Japanese market know that organizing production activities in such areas not only requires much lower costs, but can be carried out in a shorter period of time and is relatively simpler.
The main means of encouraging investment that is desirable from the point of view of helping to solve the economic problems facing the country are tax incentives, subsidies and financial incentives.
Tax incentive system
The current system of tax incentives is based on various types of laws on regional development and consists mainly of measures to reduce or even completely exempt from local taxes.
Subsidies
Subsidies are divided into national and local governments. National subsidies are used when relocating production facilities from “industrially redundant” regions and when creating social and environmental infrastructure: the amount of the subsidy depends on the size of the expansion or newly built factory space. The system for subsidizing regional employment is based on subsidies - from 18 thousand to 29 thousand yen per month - for each worker who receives work in regions with low employment as a result of the construction of new or expansion of existing production or other facilities and is given for a period of one year.
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Salary per month by profession in 2021
| Profession | Minimum, yen | Average, yen | Maximum, yen |
| Auto Mechanic | 280 000 | 322 500 | 354 200 |
| Architect | 400 000 | 533 350 | 740 000 |
| Accountant | 437 500 | 600 000 | 686 350 |
| Driver | 191 650 | 258 350 | 301 650 |
| Kindergarten teacher | 235 000 | 273 350 | 306 850 |
| Temporary worker | 66 650 | 88 350 | 93 450 |
| Doctor | 845 000 | 961 650 | 1 403 850 |
| Guide | 237 500 | 255 850 | 401 650 |
| Housemaid | 183 350 | 249 150 | 271 350 |
| Loader | 211 450 | 270 850 | 301 850 |
| Street cleaner | 218 150 | 242 100 | 267 500 |
| Designer | 270 850 | 300 000 | 331 650 |
| Journalist | 450 000 | 678 350 | 1 038 350 |
| Engineer | 433 750 | 450 850 | 520 000 |
| Cashier | 154 150 | 207 500 | 220 000 |
| Courier | 321 650 | 440 000 | 488 350 |
| Driver | 350 000 | 410 000 | 520 700 |
| Nanny | 242 500 | 283 350 | 353 750 |
| Waiter | 179 150 | 231 400 | 355 000 |
| Security guard | 287 500 | 311 750 | 350 850 |
| Airplane pilot | 1 320 850 | 1 426 650 | 1 871 650 |
| Hairdresser, makeup artist | 212 500 | 245 850 | 323 450 |
| Cook | 233 350 | 254 000 | 270 000 |
| Firefighter | 458 350 | 476 650 | 523 350 |
| Police officer | 470 800 | 525 000 | 705 000 |
| University teacher | 745 850 | 895 000 | 1 038 550 |
| Programmer | 267 500 | 355 000 | 855 000 |
| Salesman | 223 350 | 268 350 | 323 350 |
| Worker | 224 150 | 304 150 | 387 500 |
| Welder | 261 600 | 315 000 | 390 000 |
| Registered Nurse | 351 500 | 394 150 | 438 350 |
| Social worker | 240 000 | 258 350 | 270 000 |
| Insurance agent | 201 500 | 280 850 | 355 000 |
| Dentist | 1 021 200 | 1 066 600 | 1 371 800 |
| Watchman | 235 000 | 262 500 | 285 000 |
| Builder | 285 000 | 292 000 | 303 300 |
| Stewardess | 355 000 | 398 350 | 434 150 |
| Taxi driver | 188 300 | 240 000 | 268 550 |
| Teacher | 568 300 | 591 600 | 705 000 |
| Cleaner | 155 000 | 194 150 | 220 800 |
| Pharmacist | 401 600 | 443 350 | 535 700 |
| Farmer | 271 500 | 292 000 | 320 000 |
| Electrician | 285 000 | 312 500 | 355 500 |
| Lawyer | 743 300 | 863 300 | 1 353 350 |
Minimum
The minimum salary depends on where you live and is approximately 18,000-200,000 yen per month (9,000-102,000 rubles). Income up to 200,000 yen per month is considered low income in Japan.
Similar wages are widespread in low-skilled occupations:
- waiter;
- cleaner;
- nanny;
- junior office clerks.
In Japan, the minimum level of hourly earnings is legally established, which is strictly observed - 900 yen (480 rubles).
Average
The average salary in Japan by profession remains high at approximately $120,000 per year. The average income of a Japanese person is considered to be a salary from 250 to 400 thousand yen (130,000–205,000 rubles).
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If we consider the amount of annual income received by industry, the result will be as follows:
| Industry | Ian |
| Medicine | 5 320 000 |
| Finance | 4 840 000 |
| Production | 4 770 000 |
| IT and communications | 4 760 000 |
| Wholesale | 4 490 000 |
| Construction and real estate | 4 210 000 |
| Internet, media and advertising | 4 180 000 |
| Administration | 4 120 000 |
| Services and entertainment | 3 780 000 |
| Retail | 3 630 000 |
Average starting
If you decide to work in Japan, you should know that job evaluation is accepted here depending on age, length of service and gender. Young specialists earn several times less than experienced employees with experience, and men are paid higher than women working under the same conditions. On average, young professionals (as well as foreigners) can claim a salary level of 32,000–33,000 US dollars.
Maximum
A high income in Japan is considered to be a salary above 500,000 yen, which corresponds to 260,000 Russian rubles. There is no upper salary limit in Japan, since every year a specialist’s salary increases by about 10%, depending on the length of experience. In addition, permanent employees are paid a substantial bonus depending on the industry, company and economic indicators. The highest salaries in Japan are received by lawyers, doctors and pilots.
Salary by city and region
Different levels of economic development of regions affect the amount of workers' compensation.
The highest salary level for 2021 in cities:
- Tokyo;
- Yokohama;
- Kanagawa;
- Kobe;
- Osaka.
The average salary in Tokyo for 2021 was about $4,000 per month. Only another major city, Yokohama, has higher incomes than this figure – approximately $4,150 per month.
The lowest rates, approximately $2800–3000 per month, are in the regions:
- Kumamoto;
- Koti;
- Saga;
- Kagoshima;
- Miyazaki;
- Okinawa;
- Oita;
- Nagasaki.
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Taxes for business entities in the form of a legal entity
One of the first successes of President Trump is considered to be the tax reform he introduced (). It reduced the fiscal burden both on enterprises (the income tax rate was reduced to 21%) and on individuals - by increasing the number and size of deductions, the amount of income became less by an average of 2.3%.
Basic taxes in the USA for legal entities:
- corporate income tax on profits;
- excise taxes and customs duties;
- social insurance contributions for employees (the employer pays 50% of the rate for health insurance and protection against the consequences of disability due to illness or old age);
- sales tax (paid indirectly, legal entities simply transfer funds collected from customers to the budget);
- levies on source income and capital gains.
Taxation of company profits
The corporate income tax in the United States is presented at each fiscal level:
- federal flat rate – 21%;
- , collected from company income, varies - from a flat 2.5% in North Carolina to 12% in Iowa on a progressive scale;
- municipal fees - often cities choose to replenish the budget through sales fees or collect from 2 to 9% of the profits earned by enterprises.
In America, 44 states and the District of Columbia levy additional taxes on top of the 21% federal corporate tax. Another 6 entities refused to increase rates through regional surcharges: Nevada, South Dakota, Texas, Ohio, Washington and Wyoming.
At the local level, taxing the profits of enterprises is considered not very effective. Basically, they implement a sales tax or fee for certain types of activities.
VAT or US sales tax
Taxation of the added part of value, usual for Russian business, does not exist in America. Essentially, sales tax in the United States is a levy on gross receipts (turnover).
Another difference between VAT and sales tax is that the amount of the additional fee is not included in the price of the purchased product and is not reflected in the price tag. For example, to buy a cup of coffee in Miami, you would have to pay $5.34, even if there is only $5.00 in the window, because the sales tax rate is 6.8%.
“Extra” money has to be paid, since each state and even city has its own combined sales tax rate:
- by state - 45 states and the District of Columbia collect from 2.9% in Colorado to 7.25% in California;
- At the local level, the tax in America on purchases is levied in 38 federal subjects, the average figures range from 0.03% in Idaho to 5.14% in Alabama.
There are no surcharges at all in Montana, Delaware, New Hampshire and Oregon. In Alaska, the state legislature did not introduce this fiscal contribution, but allowed it to be implemented at the local level, so the weighted average here is 1.43%.
The situation by state is perfectly reflected in the non-profit Tax Foundation.
Taxes on investment income and capital gains
Any profit received by an enterprise from commercial activities or the sale of property (real estate, tangible or intangible assets) is taxed according to the standard rules for the income of a legal entity.
A separate progressive interest scale was introduced in 2021 only for individuals, and USCode specifies that the application limits for rates should be adjusted annually to reflect price changes over the past period. As of 2021, the fee must be paid based on the size of the positive difference received from the sale.
| Bid, % | Limits (for payers without a family), dollars/year | Limits (for married filing jointly), $/year |
| up to 39 375 | up to 78 750 | |
| 15 | up to 434 550 | up to 488 850 |
| 20 | 434,550.01 and above | 488,850.01 and above |
| 3.8 | if investment profit exceeded 200,000 | if investment profit exceeded 250,000 |
Along with federal rates, regional levies (up to 13.3% depending on the state) apply to capital account income.
Other countries
Compared to other countries, taxes in Japan for 2021 are much higher. In the US, the maximum tax rate is 28%, while in Japan (even after tax reforms that simplified the tax schedule and lowered the percentage) it is 65%.
Corporate taxes are 37% for standard firms and 28% for small businesses. Owners of companies must enter information about income in a special form and submit it to the tax office no later than 2 months after the end of the company’s financial year.
For ordinary people, taxes are deducted from their salaries. If there is no additional income, you do not need to submit a declaration. However, annual income should not exceed 15 million yen.
In Japan, of course, there is no corruption and people will never covet someone else’s property, but not every person who submits a declaration on their own can be trusted. Therefore, tax departments from time to time make random checks on the correctness of filling out the declaration. Particularly persistent defaulters are inspected; such inspections can only be carried out by court decision. After such decisions, companies are searched, office books are seized and measures are taken to find out the real financial position of the company.
What changed
From January 1, 2021, the list of non-taxable personal income tax includes:
| Type of income | Norm of the Tax Code of the Russian Federation | Explanation |
| Payment for travel to and from vacation destinations for employees living in the Far North and equivalent areas | New edition of clause 1 of Art. 217 (paragraph 10) | This also includes: • the cost of luggage weighing up to 30 kg; • the cost of travel for non-working family members (husband, wife, minor children actually living with the employee); • the cost of carrying their luggage. Until 2021, there was also no need to pay personal income tax on such compensation, but according to the general norm of clause 3 of Art. 217 NK. That is, there was no special norm, so disputes arose. |
| Payment for additional days off to care for a disabled child | New clause 78 art. 217 | Applies to income received no earlier than 2021. These days are set in accordance with Art. 262 of the Labor Code of the Russian Federation for persons (parents, guardians, trustees) caring for disabled children. For a long time the issue was controversial. Recent court practice and departmental explanations tended to suggest that there is no tax. |
| Income in cash and in kind related to the birth of a child and paid in accordance with the law | New paragraph 77 of Art. 217 | Applies to income received no earlier than 2021 and paid according to:
|
| One-time compensation to medical workers not exceeding 1 million rubles, which are financially supported by a state program approved by the Government of the Russian Federation. | New edition of clause 37.2 of Art. 217 | Applies to payments, the right to receive which arose from 01/01/2018 to 12/31/2022 inclusive. Until 2021, only one-time compensations under Art. 51 of the Federal Law on Compulsory Medical Insurance dated November 29, 2010 No. 326-FZ. |
| One-time compensation for teachers up to 1 million rubles received under the state program. | New edition of clause 37.2 of Art. 217 | Introduced the Law of September 29, 2019 No. 325-FZ into the Tax Code of the Russian Federation. Applies to payments, the right to receive which appeared in 2020-2022. |
| Reimbursement of expenses for housing and communal services, incl. solid waste management services. | New edition of paragraph 3, clause 3, art. 217 Tax Code of the Russian Federation | Until 2021, only compensation related to the free provision of residential premises and utilities, fuel or corresponding monetary compensation was not taxed |
| Monetary compensation in exchange for a land plot due from state or municipal property, if it is established by the legislation of the Russian Federation or the region | New clause 41.2 of Art. 2017 | Applies to income received from the 2019 tax period |
| Income in cash and/or in kind received by certain categories of citizens as part of providing them with social support (assistance) in accordance with the law | New clause 79 of Art. 217 | Applies to income received from the 2019 tax period |
| Annual cash payment to honorary donors | new clause 80 art. 217 | Condition: have the appropriate badge. Regulated by Federal Law No. 125-FZ of July 20, 2012 “On the donation of blood and its components.” |
Financial assistance provided by educational organizations:
| New edition of clause 28 of Art. 217 | Applies to no more than 4,000 rubles per tax period |
Types of fees
As of today, there are 50 different fees in the Land of the Rising Sun. The state budget is replenished primarily through local personal income tax and taxes on company profits. Moreover, everyone who receives at least some money is required to pay income tax. It doesn’t matter whether a person officially works or not.
Inheritance or transfer of property as a gift is also subject to tax. Its size depends on the value of the alienated property.
On top of the price of each purchased unit of goods, the buyer is required to pay another 3 percent consumer tax. Unlike the USA, it is included in the price once, so citizens do not have to calculate everything on their own. This tax is not collected from the purchase and sale of land, utilities, medical and funeral services, as well as from child education fees. At the same time, there is a very high excise tax on alcohol - it amounts to 44 percent of the cost of a particular drink.
Foreigners and their statuses affecting the calculation of contributions
Foreigners are persons who are not citizens of the Russian Federation, but either have confirmation of citizenship of another state or are unable to confirm such citizenship.
They can be in the Russian Federation for three reasons (Clause 1, Article 2 of the Law “On the Legal Status of Foreign...” dated July 25, 2002 No. 115-FZ):
- permanent residence, which requires a residence permit;
- temporary residence, during which a document permitting residence is issued;
- temporary stay when a person enters the Russian Federation with or without a visa, receiving a migration card and issuing a document giving the right to work.
Read more about these reasons in our material.
Foreigners can engage in labor activities:
- under an employment or civil contract agreement;
- as an individual entrepreneur.
To temporarily carry out activities, a foreigner must have a work permit (if he arrived on a visa) or a patent (if a visa is not required). The period of temporary stay in Russia will determine the validity period of the corresponding document. This period may be extended.
Does not make exceptions regarding the compulsory nature of insurance and, accordingly, with regard to the calculation of insurance premiums from foreigners in 2020–2021:
1. Neither paragraph 1 of Art. 7 of the Law “On Compulsory Pension...” dated December 15, 2001 No. 167-FZ, establishing the need for compulsory pension insurance (OPS) for all persons working both under contracts (labor or GPC) and as individual entrepreneurs, except those temporarily in the Russian Federation highly qualified specialists.
3. Neither art. 10 of the Law “On Compulsory Medical...” dated November 29, 2010 No. 326-FZ, which determines the need to obtain compulsory medical insurance (CHI) for persons working under contracts (labor or GPC) or who are individual entrepreneurs, but who are not classified as highly qualified foreign specialists or foreigners temporarily staying in the Russian Federation.
That is, insurance premiums for payments to foreigners must be calculated. But these charges have their own nuances, depending on the category of the contribution payer, the basis for the foreigner’s stay in Russia and the qualifications of the foreign specialist.
Legal provisions
The labor activity of citizens of other countries is not considered arbitrary. It has completely legitimate justifications. 114-FZ dated August 15, 1996 spells out the rules for travel across Russian borders. It states here that after arriving without official permission, invitation or visa, a person must write down the purpose of employment on the migration card. If a foreigner enters on one of the visas, he will need to receive an invitation or the visa itself must be a special one - a work visa.
Another important law is No. 115-FZ of July 25, 2002. This provision provides information about foreigners and their status. At the same time, here you can study the peculiarities of employment in the Russian economy.
