[Evgeny]

Or you have the 'official' salary of $50/month, and you get the rest paid to you in cash in the envelope each month.

Well, at least that's how things were about 10 years ago when I left - it could have changed a lot.

There was some economist who estimated that if a business in Russia pays EVERY tax it's supposed to by the law, it will pay way over 100% of the profits in taxes. So technically there is no business that is following the law 100%, giving the 'controlling organs' the power to ask for bribes. Could be an urban legend though, I don't have links.

Edit: The parent talks about general taxation, and my take is about the taxes a company has to pay for each employee on top of her salary. Still, I think, "white" and "grey" salaries is an interesting point.

[Georgiy]

Most big businesses in Russia work with grey schemes. One of the reason not so many foreign companies here, as they forbidden to pay bribes. Yet most people get payed in white. Some hire people by contracts as invidial entrepreneurs so they don't pay 54% of taxes for them, plus theese employes pay only 6% from their salaray instead of 13% to government.

[tsotha]

That's how things are done in Korea. Your official salary is only a tiny fraction of your actual salary.

[white_devil]

Care to elaborate? I've been thinking of possibly setting up some kind of shop in Korea, so it would be interesting to know more.

[tsotha]

My ex was Korean. Her dad worked at an insurance company, and every month he got his (tiny) official salary as well as an envelop full of cash, which was 4x more money. I asked her about it and she said small companies are normally completely "off the grid" from a tax standpoint, so mid-sized companies need to do this to compete. And they all do.

She opened a bar and never, you know, registered as a business or kept books or did any of the other business things you'd need to do in the US to stay out of jail.

Her impression was tax receipts come mostly from the giant chaebol like LG and Samsung.

[white_devil]

OK, thanks for the information! I wonder how all those small companies manage their cashflow though. Can they receive money to their bank accounts just like they would if paying taxes? It's kind of difficult to imagine they're all shuffling cash around.

[tsotha]

My impression (maybe wrong) is that Korea doesn't have the cash reporting rules we have in the US. So yeah. Cash.

[zeynalov]

The same system in Azerbaijan.