Separate divisions of foreign organizations with their own balance and bank account are recognized as tax agents in connection with employee salaries.
Foreign organizations, including branch and representative offices, should fulfill their obligation to pay the Unified Social Tax (ESN), and to complete all other declarations and calculations that must be made in connection to paying employees that work in branches that do not have a separate balance and bank account.
However, employees that work for branch offices of foreign firms that do not have a bank account must submit a declaration to the tax organ in their area of residency and pay the Personal Income Tax (PIT) from their salary themselves.
The Ministry of Finance came to this conclusion in a Letter dated April 22, 2009, Number 03-04-06-02/38.
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