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Tax Code Amendments Cut OTC Derivatives Market Costs

20.01.2014 17:16 / PRIME

Tax Code Amendments, in force since 1 January 2014, will cut costs for standardized OTC Derivatives Market participants, says Moscow Exchange press release.

Clearing participants are VAT exempt on their premium for clearing collateral use, cutting standardized OTC Derivatives Market participants’ costs. From now on, market price for tax purposes is the actual exchange/OTC swap and option contract price with central counterparty.

The taxpayer is now allowed to include the financial result of CC swaps and options in their profit tax base.

Moscow Exchange opened its new standardized OTC Derivatives Market on 28 October 2013, with central counterparty clearing. Centralization of OTC derivatives clearing is part of Russia’s G20 commitment. The project was implemented by the CBR and commercial banks: Sberbank, VTB Bank, Deutsche Bank, Credit Suisse, Raiffeisen Bank, Promsvyazbank, ING Bank, UniCredit Bank, and Metallinvestbank.

Taxation of financial transactionsProject Group №3