The Romance of the Ruble

Just about enough time has passed now that I can write about The Russian Taxes Incident.

I no longer break into a cold sweat thinking about it.

It no longer makes me cry. Nor does it make me sit bolt upright in bed in the middle of the night.

It all started innocently–nay, naively–enough: We wanted to pay our Russian taxes.

What fools we were.

See, Russia has this deal where they tax you at the Foreign Invader rate–something like 30%–unless you spend six months or more than 180 days in the Russian Federation. If you are there long enough, the rate drops to something like 17%. And there it stays.

Until you decide to take a job in the Grand Duchy of Luxembourg and move away from Russia in February.

January and February only have 59 days.

Something we forgot about until tax season rolled around this year, and the question of “Taxes you have paid in other countries” came up.

Okay, we owed the RF the difference between something like 17% and something like 30%. And probably they would never realize we owed it, but with The Spouse traveling to Moscow now and then, it seemed like a good idea to make sure that, Chez Beet, we were all on the up and up as far as the Ruskies were concerned.

But how to pay it?

The Spouse’s former place of employment put us in touch with the company that handles their payroll.

Easy enough, I thought. We can pay them the tax amount, and they can see that it gets in the right place.

Nyet.

First, there were pages and pages of forms, in Russian, to be completed. Followed by Powers of Attorney. Thankfully, the deadline for paying your Russian taxes is July 15, so, being as it was April when all this started, I thought we had plenty of runway.

A miracle occurs and a figure is produced. “This is what you owe,” we were told by Payroll Company.

“Great,” I told them. “So how do I get this to them? Can I pay it to you?”

Oh, nyet, nyet, and double nyet.

Taxes can only be paid, in cash, at the Tax Authority Office, or via wire transfer.

“Great. I’ll get right on that,” I replied. “Please send me the Russian Tax Authority account information. And how I communicate to them that this money should be applied to the Beet tax bill.”

Here came The First Complication: the money must originate from a Russian bank account. Did I have a Russian bank account?

Weeeeell, da. Yes, it turns out, we did still have a Russian bank account. There was little, if anything, in it, however. Not enough to cover the tax bill. But I could transfer money from our US bank account to our Russian account. I make international transfers all the time. All I need is the account number and the BIC/SWIFT code, and it is a matter of a few key strokes.

The Second Complication: The Spouse is unsure of the banking details of our Russian bank account. See, there’s hardly any money in it, and we have not lived there for over a year now. And there is the matter of an expired ATM card for it that is required for any online banking, and it seems that the new one never really found its way to him.

Never mind, however. This hurdle is easily overcome with a few phone calls, and possibly even a pop-in at the Russian bank office. I forget now. It is all a blur. But The Spouse provides me with what I need.

This is all happening around the first of July (where HAS the time gone?). Tick, tock, people, as we need to get this paid before the July 15 deadline.

I fill out the online form, as I have done so many times before. But as I do so, I remember the one and only other time I tried to transfer funds to pay a Russian bill. It was a complicated affair involving a hospital that created all of their bills in EUROS, but wanted you to pay that amount in RUBLES. I discovered this only AFTER my bank contacted me to say my transfer from dollars to euros had been rejected.

“How many rubles do you want?” I asked the hospital.

“1200 euros worth,” they replied.

“But that changes minute by minute,” I reminded them.

Finally, we gave up and walked in and handed them a credit card.

So, with the memory of that clusterfuck fresh in my mind, and the memory that anytime I initiated a wire transfer to anywhere in the world while I was sitting in Moscow red flags went off all over Citibank, I called our US bank and informed them that I was indeed me, and I was initiated a wire transfer to a Citibank in Moscow. Yes, I know it is not the same company. But surely they would be able to work together.

In the meantime, The Spouse has arranged a business trip to Moscow to coincide with the arrival of our transfer funds. He will go to the Moscow Citibank and arrange there to pay the tax bill.

Easy-peasy, right?

Now comes The Third Complication.

The money leaves our US account. I can see that on line. But days pass, and nothing appears in the Russian account. Time is running out.

I call our US bank. They look into the matter. Seems our Russian bank has rejected the funds because I did not include all the necessary information. Even though I completed every field on the on-line form.

“What do they want?” I asked US Citibank.

An additional code, as it turns out. I ask the US banker what the hell that code is. “I’ve never heard of it,” she replies. “Ask the Russian bank.”

So I call Citibank Moscow. “I need the XYZ code,” I tell them. “What is it?”

They give me the code. I call back Citibank USA and give them the code so that the Russians, who are the only ones who use this particular code, will have the code that only they know and will accept my deposit.

Oh! And I have to tell the Russians WHAT THE MONEY WILL BE FOR.

That really blows my little Western mind.

Here was another long series of complications and misunderstandings while The Spouse and I tried to ascertain the proper wording for “Mind your own fucking business.”

Turns out, the correct term was, “Personal use.”

Isn’t ALL my money for my personal use?

None of this was as light and amusing as I am making it sound here, and, I confess, I was so frustrated at one point that I sobbed, openly, on the phone with a representative from Citibank US who trying to comfort me, read me results from the previous day’s Tour de France stage.

Because now it was Wednesday, July 13, the fucking money still wasn’t there, and The Spouse had a flight out of Russia the following afternoon.

Citibank US did give me the option to just return the funds to our US account. But, because of changes to the exchange rate, in doing so we would lose over $800.

We settled, instead, on the very uncomfortable solution of borrowing the cash from a friend, paying the tax bill, and worrying about reimbursing him after.

BUT! Even this transaction required that The Spouse open an additional Russian bank account (because he was all the way across town at our friend’s bank, and it was easier to open and close an account than to navigate the streets of Moscow and still make his flight).

The tax bill was paid on time. The new account was closed. The money did eventually arrive in our Russian account, and the friend received every ruble he fronted us.  In fact, while I was in the Ancestral Village, many weeks later, I got an email from Citibank US telling me that the funds had finally arrived in Moscow.

End of story, right?

WRONG.

There was still the matter of paying the (very minor) fee we owed to the Payroll Company.

Enough money remained in the Russian account to pay them. Just set up a wire transfer, right?

Except first we had establish them as a payee. Which, this being Russia, meant we practically had to get a letter from Mr. Putin.

No wonder Russians mistrust banks.

Again rose the question of what exactly we were paying Payroll Company for.

Seriously. You have to choose from a list of options. Here, badly translated into English, is how the list of options appeared on line. You tell me which one is the right one. Ignore the blue dot.

Nonresident’s settlements and transfers for goods sold by resident to nonresident in the territory of the Russian Federation
Nonresident’s settlements and transfers on the granting by resident to nonresident of payment deferment for up to 180 days for the performance of work, provision of services, transfer of information and results of intellectual activity, including exclusive rights thereto, by resident (payments after the performance of work, provision of services, transfer of information and results of intellectual activity, including exclusive rights thereto)
Nonresident’s settlements and transfers on the granting by resident to nonresident of payment deferment for more than 180 days for the performance of work, provision of services, transfer of information and results of intellectual activity, including exclusive rights thereto, by resident (payments after the performance of work, provision of services, transfer of information and results of intellectual activity, including exclusive rights thereto)
Nonresident’s settlements and transfers for real estate sold by resident to nonresident outside the territory of the Russian Federation
Nonresident’s settlements and transfers for real estate sold by resident to nonresident in the territory of the Russian Federation
Settlements and transfers between resident and nonresident under other transactions related to foreign trade activity and not specifically mentioned in groups 10 – 30 hereof, except for payments with code 35010
Nonresident’s settlements and transfers in favor of resident related to the repayment of loans (principal debt)
Nonresident’s settlements and transfers in favor of resident related to the repayment of overdue loan debt (principal debt)
Nonresident’s settlements and transfers in favor of resident related to the payment of interest
Nonresident’s settlements and transfers in favor of resident related to the payment of overdue interest
Other settlements and transfers between resident and nonresident related to the performance by nonresident of loan obligations
Payment by nonresidents of taxes, duties and other fees to residents
Payment by nonresidents to residents of alimonies, pensions, decedent’s estate, allowances, grants, gifts and donations
Payment by nonresidents of salaries and other remuneration of labor, author’s royalties and other fees under civil law contracts to residents
Other payments by nonresidents in favor of residents under non-trade transactions
Settlements and transfers related to the return of erroneously credited or debited amounts.
Settlements and transfers under transactions not mentioned in groups 01 – 70, and except payments with codes 99010 – 99080

And you wonder why people in Russia drink so much vodka?

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  1. Jennifer says:

    Wow, just wow. That is INSANE!!

  2. Anita says:

    There may be more than one right answer (there often is when choosing how to classify your payment), but I’m going with “Other payments by nonresidents in favor of residents under non-trade transactions.”

    This story makes my teeth hurt. It also makes me want to log into the bank account we have in Ireland this weekend, just to make sure all is in order and I can still access it. I better check the dates on those Irish ATM cards too…..

    I told this story to my friend in the US, who works in A Company’s treasury/banking group. They hate (HATE) working with Russia – she said that she has dealt with all of this and more. She feels your pain and hopes you never have to deal with this again.

  3. The Expatresse says:

    I believe we went with “Nonresident’s settlements and transfers for goods sold by resident to nonresident in the territory of the Russian Federation.”

    Yes, Russian banking is a nightmare. However, we had also been warned that the bank we were working with there had a lousy reputation among expats. We only went with it because we had an account with them in the US.

  4. kate says:

    I did the same thing–got a big C bank account in the US thinking it would help things with the big C bank in Russia. Oh, SOOOOO not true.

    And the US bank put holds on my ATM card every. week. EVERY week I called and reminded them that I lived in Russia. And they noted it. And the next week at Okey my card would be denied.

    There are no C branches in Cinci. Now what?

  5. The Expatresse says:

    Kate: I cannot tell you the number of vacations where I have found myself screeching over a bad cell phone connection to C-bank about the fact they slammed my card off. The Spouse generally has his credit card declined whenever he is in the US. Very annoying and embarrassing.

    The good thing about C bank is that they never charge me an ATM fee for overseas ATM withdrawals. I pay as much as $3 to use a non-C bank ATM in Ohio (there are no branches in Columbus either).

    I remember reading a NYT article where people seemed to like Bank of America for expat life??? I could be wrong.

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