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Putin Signs MIFC Securities Taxation Bill

05.11.2013 13:43 / Interfax

President Putin has signed securities taxation amendments tailored for Moscow International Financial Center development purposes.

State registration fee for aircraft was the only part of the bill passed in the first reading. By the second reading the bill was substantially amended, mainly in regard to securities taxation. The bill was passed under the title “Amendments to Parts I and II of the Tax Code of the Russian Federation and Legislative Acts of the Russian Federation”.

Part of the amendments have been brought about by the introduction of dividend payment without shareholder lists on 1 January 2014. The issuer will pay dividends to nominees, who will in turn distribute them to end beneficiaries. The Securities Market Act has been amended accordingly.

Depositaries become tax agents for the purposes of income tax or profit tax payment on state, municipal and Russian corporate securities. The depositary/tax agent must be provided with the securities amount and the names of beneficiaries. Otherwise the income is eligible for taxation at a higher 30% rate for both income and profit tax.

Amendments also regulate taxation of foreign settlement depositaries with recently gained access to the Russian market (Euroclear and Clearstream).

The bill also prolongs until 31 December 2014 (currently expires on 31 December 2013) the application of the norm that allocates bond coupons to company expenses at a maximum of the Bank of Russia refinance rate x 1,8 for Roubles and x 0,8 for foreign currency.

The document also features an amendment introducing profit tax for foreign companies’ income from sales of real estate closed investment fund shares. The tax is payable by foreign companies not acting through their Russian branch and receiving income from Russian sources. Taxable income includes all sales of annuity or real estate closed investment fund shares. The tax is paid at the source of income at a rate of 20%.

According to the draft, assessed value, currently used as basis for individual property tax, will be annually multiplied by a deflator coefficient. Amendments to the Individual Property Tax Act stipulate that the tax is calculated annually based on latest assessed value filed to tax authorities by 1 March 2013 multiplied by a deflator coefficient.

The draft states that individual property tax for 2013 will be calculated without the deflator coefficient.

Taxation of financial transactionsProject Group №3