Prospects for reforming approaches to the legal status of a Russian resident individual

Publication type Article
Status Published
Occupation: Head of the Department of Civil Law and procedure and Private International Law, Peoples’ Friendship University of Russia (RUDN University)
Affiliation: Peoples’ Friendship University of Russia (RUDN University)
Address: Russian Federation, Moscow
Occupation: Researcher of the Vladivostok state University of Economics and service
Affiliation: Vladivostok state University of Economics and service
Address: Russian Federation, Vladivostok
Journal nameGosudarstvo i pravo
EditionIssue 6

Currently, for the recognition of an individual as a tax resident of the Russian Federation, only the period of his stay in the country during the previous 12 months is taken into account. But in 2019, the Ministry of Finance of the Russian Federation announced the need to change this approach as one of the areas of tax policy for 2020 - 2022. The main ways to improve legal regulation are the reduction of the actual period of stay on the territory of Russia from 183 to 90 days per year and the introduction of additional more flexible criteria characterizing the relationship of a person with the state. The aim of the study is a comprehensive assessment of the approach to the definition of the individuals` residence in the Russian financial law, which allows to make a conclusion about the feasibility and prospects for its reform. The article examines various aspects of the current legal regulation in this area, as well as the features of recognition of individuals as tax residents in accordance with the international agreement on the avoidance of double taxation have been investigated. The advantages of the existing approach can be attributed to its simplicity and certainty, which is associated with the use of only one objective criterion - the period of stay in the country. In such conditions, it is not difficult for tax agents and tax authorities to classify taxpayers as tax residents. This greatly simplifies administration and allows citizens themselves to better understand their status and associated rights and responsibilities. Paradoxically, this feature is also the lack of regulation. Since, in fact, it completely gives tax residency to the power of the citizens themselves, primarily the wealthy. The simplicity of its definition makes it possible to practically freely change the Russian tax jurisdiction to another, depending on personal benefit. As a result, the state is unable to levy taxes on the income of persons who de facto have close personal and economic ties with the Russian jurisdiction, but de jure do not meet the formal characteristics of a tax resident, planning in advance the period of their stay in Russia. The simplicity in establishing the tax residency of the Russian Federation allows taxpayers to practically freely change the Russian tax jurisdiction to another, depending on personal gain. As a result, the state is unable to levy taxes on the income of persons who de facto have close personal and economic ties with the Russian jurisdiction, but de jure do not meet the formal characteristics of a tax resident, planning in advance the period of their stay in Russia. The article analyzes the main approaches to determining the residence of individuals used in world practice, as well as the measures taken by various states to avoid abuse of the right by individuals. Particular attention is paid to the study of tax residence as a key condition for the implementation of the international agreement on the exchange of information on financial accounts (CRS MCAA), since unfair manipulation of tax status can also impede the state financial control. It is also interesting to study the issue of determining the residence of individuals in the context of the COVID-19 virus pandemic, since the cancellation of transport links between countries for a long period of time may be forced to change the tax status of many people. As a result of the research, the author came to the conclusion that the approach to determining the tax residence of individuals in Russia differs from that used in most developed countries and needs some resemblance with global practice. In particular, the introduction of the concept of a center of vital interests into Russian legislation will allow considering the connection of a person with Russian jurisdiction on an individual basis, excluding the possibility of abuse.

Keywordstax resident, individual, personal income tax, tax transparency, CRS
AcknowledgmentThe reported study was funded by RFBR, project number No. 20-111-50121.
Publication date28.06.2021
Number of characters49415
100 rub.
When subscribing to an article or issue, the user can download PDF, evaluate the publication or contact the author. Need to register.

Number of purchasers: 0, views: 563

Readers community rating: votes 0

1. Koval A.A., Levashenko A.D., Sinelnikov-Murylev S.G., Trunin P.V. Reform of currency regulation and currency control in Russia // Center for Strategic Developments. Moscow. March 2018 [Electronic resource]: (in Russ.).

2. Frolova E.E., Tsepova E.A. 30 years of currency liberalization in Russia: prospects for the abolition of restrictions on the movement of capital of individuals // State and Law. 2020. No. 4. P. 108–124 (in Russ.).

3. Altshuler, R., & Goodspeed, T.J. (2015). Follow the leader? Evidence on European and US tax competition // Public Finance Review, 43 (4). P. 485–504.

4. Appleton, S.F. (2013). Leaving Home-Domicile, Family, and Gender. UCDL Rev. 47. P. 1453–1519.

5. Aster, S. (2013). If Her Name Were Theo, There Would Be No Tax: Windsor v. United States, DOMA, and the Federal Tax Code. The Modern American, 9, P. 8 - 19.

6. Avi-Yonah, R.S. (2005) All of a Piece Throughout – The Four Ages of U.S. International Taxation. Virginia Tax Review. No. 2. P. 313–338.

7. Avi-Yonah Reuven S. (2004) International Tax as International Law. Tax L. Rev. 57 No. 4. P. 483 - 501.

8. Bauder, H. (2014). Domicile citizenship, human mobility and territoriality // Progress in Human Geography, 38 (1), P. 91 - 106.

9. Beale, J.H. (1919). Jurisdiction to Tax. Harvard Law Review, 32 (6). P. 587–633.

10. Cavelti, L.U. (2013). Automatic information exchange versus the withholding tax regime globalization and increasing sovereignty conflicts in international taxation // World Tax Journal (IBFD), 5 (2). P. 172–214.

11. Chirinko, R.S., & Wilson, D.J. (2017). Tax competition among US states: Racing to the bottom or riding on a seesaw? // Journal of Public Economics, 155. P. 147 - 163.

12. Christians, A. (2017). Buying in: Residence and Citizenship by Investment // Louis ULJ, 62. P. 51–72.

13. Colón, J.M. (1997). Changing US Tax Jurisdiction: Expatriates, Immigrants, and the Need for a Coherent Tax Policy. San Diego L. Rev. 34, 1. P. 1–91.

14. Contractor, F.J. (2016). Tax avoidance by multinational companies: Methods, policies, and ethics // Rutgers Business Review, 1 (1), P. 27–43.

15. Daurer, V., & Krever, R. (2014). Choosing between the UN and OECD tax policy models: An African case study // African Journal of International and Comparative Law, 22 (1). P. 1 - 21.

16. Dharmapala, D. (2016). Cross-border tax evasion under a unilateral FATCA regime // Journal of Public Economics, 141, P. 29–37.

17. Djankov, S. (2017). United States is Outlier in Tax Trends in Advanced and Large Emerging Economies. Peterson Institute for International Economics. Policy Brief. No. PB17-29. Available at: (accessed: 03.08.2020).

18. Eberle, E.J. (2011). The methodology of Comparative Law. Roger Williams UL Rev. 16. P. 51–72.

19. Fatale, M.T. (2000). State Tax Jurisdiction and the Mythical "Physical Presence" Constitutional Standard // The Tax Lawyer. 54 (1). P. 105–142.

20. Gerber, C., Klemm, A., Liu, L., Mylonas, V. (2018). Personal income tax progressivity: trends and implications. International Monetary Fund Working paper WP/18/246. Available at: (accessed: 14.08.2020).

21. Ghodsi, Z., Webster, A. (2018). UK Taxes and Tax Revenues: Composition and Trends. Intech Open. Vol. 74380. P. 83 - 96.

22. Himci, B., & Bungo, G.T. (2015). Domicile And Residence Of Individuals Under Ec Law And Albanian Legislation. Revue Européenne du Droit Social, Volume XXVIII, issue 3. P. 30–43.

23. Kemme, D.M., Parikh, B., & Steigner, T. (2017). Tax havens, tax evasion and tax information exchange agreements in the OECD // European Financial Management. No. 23 (3). P. 519 - 542.

24. Kirsch, M.S. (2014). Revisiting the Tax treatment of citizens abroad: reconciling principle and practice. Fla. Tax Rev. 16 (3). P. 117–222.

25. Maisto, G. (ed.). (2010). Residence of individuals under tax treaties and EC law (Vol. 6). IBFD. P. 17.

26. Momirov, A., & Fourie, A.N. (2009). Vertical comparative law methods: tools for conceptualising the International Rule of Law. Erasmus L. Rev. 2. P. 291 - 309.

27. Moreno, A.B. (2020). COVID-19 and Fiscal Policies: Unnecessary and Yet Harmful: Some Critical Remarks to the OECD Note on the Impact of the COVID-19 Crisis on Tax Treaties. Intertax, 48 (8/9). P. 814–830.

28. Morris, M. (2017). The 26 OECD Common Reporting Standard Loopholes. Available at: (accessed: 30.07.2020).

29. Morten, B. and Zeume, S. (2018). The Review of Financial Studies, Volume 31, Issue 4, April 2018. P. 1221–1264.

30. Naseif, A.H., Hasan, S.I., Malik, Y.S., et. al. (2019). A Theoretical Review on Global Trends of Company Income Taxes and Alternatives of Tax Reforms // Account and Financial Management Journal. Vol. 4. P. 1883–1895.

31. Noked, N. (2018) Tax Evasion and Incomplete Tax Transparency. Laws, 7 (3), 31; Available at: (accessed: 20.08.2020).

32. Norr, M. (1961). Jurisdiction on Tax and International Income. Tax L. Rev. 17. P. 431.

33. Owens, J. (2015). Tax Transparency and BEPS // Journal of Tax Administration, 1 (2). P. 1–10.

34. Parchet, R. (2019). Are local tax rates strategic complements or strategic substitutes? // American Economic Journal: Economic Policy, 11 (2). P. 189 - 224.

35. Pross, A. (2015). How Tax Transparency Went Global - the new automatic exchange standard: from concept to reality. International Tax Review. 25 March 2015. Available at: (accessed: 30.07.2020).

36. Rohlin, S., Rosenthal, S.S., & Ross, A. (2014). Tax avoidance and business location in a state border model // Journal of Urban Economics, 83, P. 34–49.

37. Saint-Amans, P. (2016). Global tax and transparency: We have the tools, now we must make them work. OECD Observer. Available at: (accessed: 03.08.2020).

38. Shenkman, M.M., Rothenberg, L.E., & Matak, J. (2019). Changing Domicile for Tax Benefits and Asset Protection: The TCJA and Recent Court Decision Change the Calculus // The CPA Journal, 89(10), P. 62 - 67.

39. Shukla, V., & Shukla, S.K. (2019). Globalization and Tax Jurisdiction // ZENITH International Journal of Multidisciplinary Research, 9 (2). P. 58 - 64.

40. Swain, J.A. (2003). State Income Tax Jurisdiction: A Jurisprudential and Policy Perspective. Wm. & Mary L. Rev. 45. P. 319.

41. Thomas, S.R. (2018). Domicile in Multistate Personal Income Tax Residency Matters: Enter the Swamp at Your Own Peril. Pace L. Rev. 2018. Vol. 39. P. 875.

42. Valente, P. (2001). The ‘Center of Vital Interests’: A Review of Italy’s Rules on Tax Residence. Tax Notes International, P. 55 - 59.

43. Worster, W.T. (2017). Human Rights Law and the Taxation Consequences for Renouncing Citizenship // Louis ULJ. 62. P. 85 - 102.

44. Zelinsky, E.A. (2017). Defining Residence for Income Tax Purposes: Domicile as Gap-Filler, Citizenship as Proxy and Gap-Filler, 38 Mich. J. Int'l L. 271 Available at: (accessed: 16.08.2020).

Additional sources and materials

Система Orphus