Companies and their employees should file PIT in the following cases:
The income is subject to income tax on individuals.
Senior managers receiving remuneration from the head office based abroad or Russian citizens renting apartments out must declare such income.
To avoid double taxation of income received from abroad, it is important to be familiar with the current legislation. Let’s take a case of a Russian citizen who is paid dividends in the Netherlands, and whose income tax is paid out to the Netherland tax authorities. According to the “Agreement between the Government of the Russian Federation and the Government of the Kingdom of the Netherlands for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and capital”, the tax paid in the Netherlands can be reflected in the PIT declaration filed in Russia. In this case an individual needs to provide supporting documents from the foreign tax authorities.
Employee needs a tax deduction
The most frequently claimed tax deductions are social and property-related expenses (education and health care, purchase of an apartment, mortgage interest, etc.).
An individual needs to file a list of documents confirming the right to deduction together with the PIT return. When filing for a property-related tax deduction, one can add the interest on the mortgage loan (up to 3 000 000 rubles in 2014) to the amount of the purchase (up to 2 000 000 rubles).