2015/10 - Tax Alert

The Federal Law no.116-FZ dd. May 5th, 2014 has introduced changes into the Labor Code of the Russian Federation (hereinafter – the “Labor Code”) regarding prohibition of the personnel provision (“leased employment”). The new version of the Labor Code will enter into force from January 1st, 2016.

Mazars in Russia: Tax Alert – October 1, 2015

We give below highlights of the new provisions:

  • Leased employment is such an employment performed by the employee under the instructions of the employer in the interests, under the management and control of the individual or legal entity, not being the employer of this employee. From January 1st, 2016 a prohibition of leased employment will be set forward.
  • Whom it concerns? The proposed changes concern the companies who use in their business activity the contracts on provision of the personnel, secondment agreements, outsourcing and/or outstaffing agreements.
  • The Labor Code provides with the possibility of work by the employee for the individual or legal entity, not being her employer, in the following cases:
     - The activity on provision of personnel is implemented by private employment agencies,
     - In other cases specified by the federal law. Currently, these laws have not been adopted yet.
  • Private employment agencies and entities that will perform the activity on provision of the personnel shall meet the strict requirements:
     - Charter capital in the amount not less than RUB 1 mio (~13,600 €),
     - Absence of debt related to taxes, fees and other obligatory payments to the budgets of the Russian Federation,
     - The CEO of a private employment agency must have a higher education as well as a work experience in the field of employment or assistance in employment in Russia in the period not less than 2 years during the last 3 years,
     - The CEO of the private employment agency must not have convictions for crimes against personality or crimes in economy sphere.

Please find attached English and Russian versions of Tax Alert.

Sincerely yours,
Tax and Legal Department of Mazars in Russia 

Want to know more?