Change in Russian tax residency status when using banking services abroad

In early March 2025, the Russian Ministry of Finance issued an information letter notifying financial market organizations that data from remote banking services cannot automatically determine a client’s tax residency status. This data can only serve as grounds to request updated tax residency information from clients.

The Russian Ministry of Finance, along with Rosfinmonitoring, the Bank of Russia, and the Federal Tax Service, are preparing changes to Government Decree No. 693 (June 16, 2018). Special attention will be given to people who, while abroad, use remote access to financial services in more than 50% of cases for at least six months.

The likely consequences of using online banking from other countries may include changes to the user’s tax status. Depending on the situation, a user might be recognized as a resident (with the obligation to pay taxes on all global income) or a non-resident (with an increased income tax rate of 30%).

We believe there is a significant probability that this regulation will be implemented through a government decree, and we recommend considering these factors when working with Russian banks. However, using geolocation data as proof of residency/non-residency status will face several difficulties due to the current architecture of communication networks and the lack of tax information exchange with many foreign countries.