Legal news
and practices in Russia

Question: About personal income tax when receiving funds from an individual by transferring from card to card.

Answer:

The Federal Tax Service has considered the Internet query dated 13.06.2018 on the procedure for taxing personal income tax received from another individual by transferring from card to card, and reports the following.

Taxation of income of individuals is carried out in accordance with the provisions of Chapter 23 "Tax on income of individuals" of the Tax Code of the Russian Federation (hereinafter, the Code).

According to Article 209 of the Code, the object of taxation on personal income is recognized as income received by taxpayers:

- from sources in the Russian Federation and (or) from sources outside the Russian Federation - for individuals who are tax residents of the Russian Federation;

- from sources in the Russian Federation - for individuals who are not tax residents of the Russian Federation. In accordance with clause 5 of Article 208 of the Code, income from operations related to property and non-property relations of individuals recognized as family members and / or close relatives in accordance with the Family Code of the Russian Federation is not recognized as income, with the exception of income received by such individuals in the result of the conclusion between these persons of civil law contracts or labor agreements.

At the same time, on the basis of clause 18.1 of Article 217 of the Code, income in the form of money received by taxpayers from individuals as a gift, shall not be subjected to taxation by the personal income tax.

The obligation to file a tax return on personal income tax (form 3-NDFL) in such cases is absent.

Thus, a transfer from an individual free of charge to the account of another individual, regardless of the amount of such transfer, is not subject to personal income tax.

At the same time, funds received on the account of an individual as payment for goods, services, remuneration for labor duties or under civil law contracts are recognized as income of such an individual subject to personal income tax in the prescribed manner.

06/27/2018