RS Q & A Is it necessary to be registered with Russian tax authorities?

Is it necessary to be registered with Russian tax authorities?

A Swiss company is going to provide services under a contract with a Russian organisation in the territory of Russia. The company does not have any subsidiaries, representative offices or branches in Russia. Three employees of the company, who are foreign nationals, are going to be working on a property in Russia for 60 days in August through October 2012. The foreign nationals will be paid by the Swiss company.
Does the Swiss company have to register with Russian tax authorities?
Does it have to pay VAT?

If the Swiss company is going to operate in Russia for no more than 12 months then it does not have to register with Russian tax authorities because of this as long as it can confirm that it is registered in Switzerland in accordance with the established procedure. Confirmation of registration in another country can be provided in free form that the document must unequivocally state that during the period that the company provides services in Russia it remains a permanent resident of Switzerland. The document must be certified by the director of the Federal Tax Directorate of Switzerland or by his/her authorised representative. In this case VAT on the amounts paid by the Russian organisation to the Swiss contractor must be deducted and paid by the Russian company each time it makes payment to the Swiss contractor.

If the Swiss company opens an account with a Russian bank it has to register with the Russian tax authorities.

Prepared by experts of the GARANT Legal Consulting Service
For detailed explanations of the reply, please, contact the authors