Go to main page

If, during a business trip abroad, an employee is injured and requires disability leave, in certain cases, the company must cover it. In certain cases, these expenses may be compensated by the Social Insurance Fund.

The law states that temporary disability benefits are paid on the basis of Russian medical certificates. Expenses based on foreign medical certificates (including those from CIS countries) are not recognized for compensation purposes.

However, this does not mean that the sick or injured employee who had to undergo medical treatment while abroad will not be compensated.

First of all, foreign medical certificates must be translated into Russian line-by-line, and the translation must be notarized. Then, the employee or his/her employer must contact a state-funded medical organization (or as provided by medical insurance) according to his/her place of residence or place of employment.

The authorities at the medical organization will decide if a Russian medical certificate can be issued based on these medical documents.

If a Russian medical certificate is issued, the disability benefits will be paid according to the standard procedure. The legislation does not contain any other specific requirements for this process.

Thus, according to standard procedure, the first three days of disability leave are covered by the employer, and the rest – through the Social Insurance Fund. Expenses for covering disability payments should be reflected in the company's accounting according to general principles.

As for tax accounting, benefit expenses paid for the first three days may be reported as expenses.

If the medical organization refused to issue a Russian medical certificate, the employer is not obligated to pay disability benefits, unless this responsibility is specifically stipulated within the labor contract with the employee or by an internal local normative act.

In this case, any disability benefits paid may not be taken into account for tax purposes due to the absence of confirming documents.

Please note: if a Russian medical certificate is issued, disability expenses are tax deductable. It makes no difference if the medical expenses were related to a trip abroad was related to business purposes and requested by the employer, or for person reasons on the part of the employee (i.e. for medical treatment or vacation).

What if the company also compensates other expenses related to the disability?

Related expenses (such as translation of a foreign medical document, notarization expenses, etc.), can, in some cases be tax deductable if the expenses can be justified under "economic feasibility" requirements. If the trip abroad was conducted for business purposes in the interest of the company, and the employer has valid reasoning for declaring these expenses, most likely, they will be deductable.

If the trip was conducted for personal reasons of the employee (i.e. to receive medical treatment abroad), the related expenses are not tax-deductable.

In cases when medical treatment abroad is compensated (in full or in part), the employer has the right not to withhold PIT from compensation payments, but only on the condition that the payment was made from clean net profit, from funds remaining after profit tax was paid and accounted for. In all other cases, PIT must be withheld.

Follow Alinga

Back to the news list