The Federal Tax Service (ФНС), Russia’s tax authority, reminded employers that the claim that any foreign national may register as a professional income tax payer (налог на профессиональный доход, НПД)—a Russian tax regime for self-employed individuals—is incorrect. Eligibility depends on citizenship and compliance with the law. For a company, this means that verifying a foreign contractor’s status cannot be reduced to accepting their statement that they work as a self-employed person.
Which individuals the Federal Tax Service clarification identifies as potential professional income tax payers
The clarification names citizens of Armenia, Belarus, Kazakhstan and Kyrgyzstan—the states of the Eurasian Economic Union (ЕАЭС). The possibility of applying the professional income tax regime is also provided for citizens of Ukraine. The Federal Tax Service’s stated position applies specifically to these categories of foreign nationals.
This list is important for an initial assessment of a candidate for engagement. If the contractor’s citizenship is not among the countries named, this clarification does not support the conclusion that they are entitled to apply the professional income tax regime. The list should not be expanded by analogy or on the basis of a general understanding of self-employment.
Why HR and procurement functions need to verify citizenship
When engaging a foreign contractor, citizenship is one of the facts that must be established before work begins. It determines whether the individual belongs to the group of persons for whom the law provides the possibility of applying the professional income tax regime. This check helps ensure that the working relationship is not based on an unverified assumption.
In practice, it is useful to separate two questions: who the contractor is and whether the law permits them to apply the professional income tax regime. Foreign citizenship alone does not answer the second question. The Federal Tax Service expressly states that eligibility depends not on a foreign national’s general status, but on citizenship and the requirements of the law.
Which provision to rely on for an internal check
The Federal Tax Service links the conditions for foreign nationals to apply the professional income tax regime to part 3 of Article 5 of Law No. 422-FZ (Закон № 422-ФЗ), the federal law governing this tax regime. Before formalizing the relationship, an employer or other customer should consult this provision specifically and compare it with the citizenship of the particular contractor.
The clarification does not report any change in the law and does not introduce a new procedure. Its purpose is to clarify the existing rule and refute the widespread misconception that the professional income tax regime is available to any foreign national. Therefore, the control procedure should record the check as the application of an existing provision, rather than as a response to a new obligation.
What should not be inferred from the tax authority’s position
The Federal Tax Service material does not address migration documents, the procedure for obtaining them, penalties, special deadlines or the consequences of errors. This clarification cannot be used as a basis for conclusions about which documents a foreign national must have beyond the question of whether they may apply the professional income tax regime.
The source also does not describe further steps after checking citizenship and the provision of law: for example, the contents of the contract, the payment procedure or separate HR procedures. If a company needs decisions on these matters, they cannot be substituted by this clarification. The only confirmed conclusion here is that, before cooperation begins, the citizenship and the conditions of part 3 of Article 5 of Law No. 422-FZ should be checked.
FAQ
Can any foreign national work as a self-employed person under the NPD regime?
No. The Federal Tax Service states that eligibility depends on citizenship and compliance with legal requirements.
NPD is Russia’s tax regime for professional income, commonly used by self-employed individuals.
Which countries’ nationals are named in the Federal Tax Service clarification?
The clarification names nationals of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Ukraine.
The Federal Tax Service (ФНС) is Russia’s tax authority.
What does a company need to verify before starting cooperation with a foreign contractor?
The company must confirm the contractor’s citizenship and check Part 3 of Article 5 of Law No. 422-FZ. It must not rely solely on the contractor’s statement that they work as a self-employed person.
Law No. 422-FZ regulates the NPD tax regime in Russia.
Can this clarification be used to determine which migration documents a foreign national needs?
No. The Federal Tax Service material does not address migration documents, time limits, sanctions, or the procedure for further formalizing the relationship.
What to check
- Confirm the foreign contractor’s citizenship before cooperation begins.
- Compare the citizenship with the categories named by the Federal Tax Service: Armenia, Belarus, Kazakhstan, Kyrgyzstan or Ukraine.
- Consult part 3 of Article 5 of Law No. 422-FZ.
- Do not assume that the professional income tax regime is available to every foreign national.
- Do not use this clarification to draw conclusions about migration documents, deadlines, penalties or other matters not addressed in it.