Dmitriy Medvedev, the president of the Russian Federation, signed amendments to the Tax Code, which effectively abolish capital gains tax for foreign investors on sale of Russian equities listed on a stock exchange.
On June 8 the new law amending the Tax Code has come into force. The law makes the Russian securities market more attractive to foreign investors by stipulating, among other things, that income received by foreign investors from sale of Russian equities listed on a stock exchange is not subject to any withholding tax in Russia.
The new tax regime will be applicable to both on-exchange and OTC transactions with equities meeting the above requirements. The law provisions will have retroactive force with regards to transactions executed dating back to January 1.
Previously 20% capital gains tax was applied to the sale of equities of Russian companies, where more than 50% of the assets consist of real estate property located on the territory of the Russian Federation, as well as to sale of their derivative instruments.
(UniCapital)