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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: UK Tax
Satisfied Customers: 4542
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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UK - Russia Double Taxation QuestionHi,I am a UK citizen

Customer Question

UK - Russia Double Taxation Question




I am a UK citizen resident in UK and also a sole director of a Service Limited company registered in UK.


I now have an offer for working in Russia on a long term contract for which the agency proposes me to apply for a Highly Skilled Migrant Visa which will allow me to work continuously in Russia (without the 90 days out of 180 days restrictions on normal Business Visa).


Even though the agency entices me with 13% low taxation in Russia, I am bit concerned on my company status in UK also as I am the main source of income for my company and my family. I am bit confused on how the double taxation works?


I am considering options,


A - to make my UK company as dormant and enter Russia as HS Migrant until the Russian contract ends, there by paying tax only in Russia (or is there some to pay in UK also?)


B - go via a umbrella company in Russia; work and pay tax on amount required to be disclosed to Russia for HSM Visa obtained via the umbrella company and pay the rest as contract agreement to my company so that it can also continue to exist in UK.


In option B, how does my other incomes like Dividend from my company, etc... are considered by the Russian authorities and the tax paid to the Russian authorities by the HMRC? Please provide me your suggestions from the tax perspective.


Edit: Could you please include the IR35 considerations in option B and how that impacts my taxability. I am not planning to work in Russia more than 2 yrs in all cases even though the initial agreement is only 6 months repeatable.

Submitted: 3 years ago.
Category: UK Tax
Expert:  Rakhi Vasavada replied 3 years ago.
Dear Friend,

Hello and welcome. Thank you for using Just Answer.

The choice would be simple. Is the company that you would work for in Russia would be paying you MORE than what you would have otherwise earned through your UK company ?

If the anwer is YES, then you should make the company dormant as the income from Russia would be more than what you would have earned through your UK Company.

I presume that without you, UK company will not make any income. If this is the case, then I would not advice going through complexities of option B.

I am sure this would help.

You may please leave a positive rating if this helps as that is the only way we receive credit for assisting you. Alternatively feel absolutely free to revert with more queries if you have.

Warm Regards
Customer: replied 3 years ago.

Hi Rakhivasavada,


Thanks for your reply.


What is the side effect of dormanting my company? How does it affect my tax liability and my company's tax liabilities.


I want to analyse option B also to take a learned decision as I am also considering employing someone in uk if a prospective lead materialises. Also option B was suggested by the agency.


Kind Regards,


Expert:  Rakhi Vasavada replied 3 years ago.
Dear Friend,

Let me opt out and see if other expert can assist you with.

Warm Regards

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