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Tax Benefits to Give Corporate Bonds an Edge Over Deposits

03.12.2015 12:00 / TASS

Making Russian corporate bonds coupon exempt from tax will make people prefer bonds over bank deposits, says National Stock Market Participants Association CEO Alexey Timofeev.

President Putin said earlier today that coupon received by private individuals on Russian corporate bonds should be made tax exempt.

“This initiative will level the field for private investors and present a viable alternative to bank deposits. Amendments could be passed this year to be enacted next year”, said Timofeev.

According to him, the initiative has been debated for a year by the financial market and the Ministry of Finance.

NAUFOR has proposed to apply bank deposit taxation rules to income derived from corporate bonds acquired through Individual Investment Accounts.

Timofeev says deposit tax rules has an advantage that prevents people from choosing financial market instruments instead of deposits.

The Tax Code states that in the process of income tax base calculation income from coupons should be marked as securities transaction income. Income tax for corporate bonds income is 13%.

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