Russia Tests Tax Transparency Scheme for Staffing Industry

Russia Experiments with Client-Led Tax Payments in Staffing

Russia's Federal Tax Service (FTS) is launching an experiment to crack down on widespread tax evasion in the personnel-provision industry. The scheme, set to begin on 1 September 2026—though the Chamber of Commerce has asked for a two-month delay to 1 November—will oblige large clients to step into the tax collector's role.

Under the pilot, 34 of the country's largest retail and e-commerce companies will calculate and transfer a share of contractors' tax liabilities directly to the workers' unified tax accounts. The FTS says the model will ensure timely payment of taxes and scrap the shadowy practices that have flourished behind temporary staffing arrangements.

The market for temporary staff, hiring and business-process outsourcing was worth an estimated 570 billion rubles in 2025 and is expected to surpass 660 billion rubles this year as acute labour shortages intensify. Experts believe 15–20% of that activity—over 100 billion rubles—operates in a legal grey zone, costing the state more than 35 billion rubles a year in lost VAT, income tax and social contributions. Fully illegal workers could number between 5.5 million and 24.9 million across the economy.

During the one-year experiment, the client company will bear the direct responsibility for calculating how much tax an agency's personnel should pay and for remitting those funds. This shifts the point of fiscal control away from sometimes-unreliable staffing intermediaries, which the tax service hopes will drain the shadow market and create a level playing field for honest operators.

Inside the Shift: What the FTS Experiment Means for Retail and the Grey Market

Tax Gap: Why Moscow Is Acting Now

The scale of the leakage is driving the intervention. With the personnel market ballooning, even modest percentages translate into billions of rubles. The FTS estimates that shadow schemes—such as booking workers as self-employed without genuine independence, under-reporting wages or routing payments through shell firms—strip more than 35 billion rubles annually from the budget. Bringing even part of the informal workforce into the legal system could add hundreds of billions more in revenues.

How the Client-Pays-Taxes Model Works

Instead of trusting the staffing agency to handle all fiscal duties, the experiment mandates that the end customer takes charge of the tax calculation. For simplified-tax and professional-income regimes, the client will ensure 100% payment; for VAT and social contributions, 75%; and for personal income tax, 50%. The sums are transferred directly to the contractor's unified tax account. In practice, a retailer needing 100 temporary shop-floor workers will compute the payroll taxes itself and remit them, while the agency remains the legal employer for other obligations.

Risks for Participating Companies

The new role brings significant exposure. Transferred funds could be automatically applied against an agency's pre-existing tax debts under Russia's tax code, leaving current liabilities unpaid. Errors in the headcount or identity data supplied by agencies—or hidden information on migrants and self-employed workers—could create tax gaps for which the client may be held accountable. Furthermore, if the client exercises tight operational control over temporary staff, regulators may reclassify the relationship as ordinary employment, triggering back taxes, social contributions and fines.

Why Retail and E-Commerce Are First

The 34 selected companies come from sectors where flexible staffing is endemic. Retailers and online platforms rely heavily on temporary workers for seasonal peaks, logistics and customer service, making them ideal test beds. By targeting these firms, the FTS can gather data on how the model performs under high-volume, high-turnover conditions before deciding whether to roll it out to construction, logistics and other informal-heavy industries.

What Happens If It Succeeds

If the experiment delivers higher tax receipts, fewer disputes between businesses and the FTS, and a shrinking grey sector, the government intends to create a permanent industry-wide standard. This would fundamentally reshape the Russian staffing market, forcing out agencies that have survived on tax optimization while rewarding those with transparent operations. Trade unions have cautiously welcomed the move but warn it must not become a backdoor for normalizing contingent labour where regular employment contracts are appropriate.

What Participating Companies Must Do Now

• Verify agency data rigorously: Demand full, accurate registers that include all personnel, correct SNILS numbers and transparent subcontractor chains. Even innocent errors could lead to unpaid tax liabilities falling on your company.
• Assess reclassification risk: Review how you manage temporary staff. If you set schedules, assign tasks and supervise daily work as if they were your own employees, a tax authority reclassification could trigger substantial arrears of social contributions and personal income tax.
• Budget for the compliance overhead: The new duties to calculate and transfer 75% of VAT and social contributions, 50% of personal income tax and 100% of simplified/professional taxes will require upgraded accounting systems and staff training.
• Plan around potential pilot delays: The Chamber of Commerce has proposed pushing the start date to 1 November 2026. Monitor the official timeline and use any extra window to run internal tests of the payment flows.