In accordance with recent amendments to the Russian Tax Code, income derived from the sale or disposal of shares and parts of Russian companies will be subject to a 0% tax rate.
In order to benefit from the new tax exemption, several conditions must be met. For example, the party receiving the income must have owned the shares on an uninterrupted basis for at least five years. In terms of the shares, one of the following requirements must be met:
- The shares may not be traded on an organised share market.
- If the shares are traded on an organised market, they must be shares of a company operating in the hi-tech (innovative) sector of the economy.
If the abovementioned conditions are met, the income from the sale and disposal of shares and of participations in Russian companies is also exempt from personal income tax.
However, the amendments are applied only in respect of shares and participations acquired after 1 January 2011. Consequently, this means that taxpayers will be able to benefit from the exemption starting only from 1 January 2016.
[Federal Law No. 395-FZ, “On Amending Part Two of the Tax Code and Certain Legislative Acts of the Russian Federation”, dated 12 December 2010]