Forensic examination employer vs. Russian citizen
The article may be useful for Kazakhstani employers attracting citizens of the Russian Federation.
- Labor activity of a citizen of the Russian Federation in the Republic of Kazakhstan;
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Tax liabilities of a citizen of the Russian Federation and an employer in Kazakhstan.
According to the Treaty on the Eurasian Economic Union dated January 1, 2015, the Republic of Kazakhstan and the Russian Federation are parties to the EAEU. Due to the above, there is a visa-free regime between these countries. Thus, a company does not need to obtain a work permit for an employee to carry out labor activities in the Republic of Kazakhstan. In this case, it will be sufficient to conclude an employment contract with the employee and undergo the relevant registration with the migration authority.
In accordance with the Labor Law of the Republic of Kazakhstan, the following documents are required to conclude an employment contract:
1) Education document (diploma, certificates, etc.);
2) Proof of employment or employment record;
3) certificate of medical examination;
4) Original passport.
Also note that there is no need to legalize educational documents (diplomas, certificates) issued by an educational institution of the Russian Federation. According to the EAEU agreement, an employee has the right to stay in the territory of the Republic of Kazakhstan without registration for 30 days. If the employee stays in the Republic of Kazakhstan for more than 30 days from the moment of entry, the company within 3 working days must submit to the Migration Authority a notice of arrival of a foreign employee for the term of the employment contract and provide the following documents:
1) a copy of the employment contract;
2) Original migration card;
3) Original passport.
After submitting the required documents, an employee of the Migration Authority returns the original passport, migration card and special permit for labor activity in the Republic of Kazakhstan to the foreign worker within one working day.
Please note that the company is obliged to notify the Migration Authority by official letter of the employee’s entry into the Republic of Kazakhstan each time, within three working days from the date of arrival.
2) Tax liabilities of a citizen of the Russian Federation and his employer in Kazakhstan.
Taxation of non-residents is governed by Article 19 of the Tax Code of the Republic of Kazakhstan. At the same time, personal income tax withheld from the employer for a foreign citizen is 20% on the basis of a service contract; 10% on the basis of an employment contract.
Before a company can pay taxes for a foreign employee, the employee must obtain an IIN (INN) from the State Tax Committee of the Republic of Kazakhstan. Thus, only then can the employee officially start work. It usually takes at least 3 business days for the process of obtaining an IIN.
If an employee has a residence permit of the Republic of Kazakhstan, the company must pay the same taxes as for a citizen of the Republic of Kazakhstan. Namely, personal income tax, social security rate, pension contributions, and health insurance.
The social rate is paid depending on the taxation regime. That is, if the LLP operates under the general taxation regime (20% personal income tax) and the simplified taxation system (3% personal income tax), the employer pays the Social rate of 9.5%, which is determined by Art. 485 TC RK.
Contributions for health insurance, in accordance with paragraph 1 of Article 27, paragraph 3 of Article 29 of the Law of RK dated November 16, 2015 № 405-V “On Compulsory Social Health Insurance” for 2019 – 1.5%.
In 2020 Health Insurance will be – 2%.
If an employee does not have a residence permit, the employer pays the same taxes as for a citizen of the Republic of Kazakhstan, except for pension contributions, and such employee is not entitled to personal income tax benefits.
