Equities - rates, eligibility, availability of relief etc. - Russia

02.02.2021

Withholding Tax

Holding restrictions

No

Standard rate on  equities

15%

The standard rates of withholding tax on dividends from Russian equities is 15%.

Prior to 1 January 2015, the maximum withholding tax rate was 30% for undisclosed positions.

The tax rate applicable to dividends on shares in Russian Companies is 13% for Russian tax residents legal entities and 15% since 1January 2021 (13% until 31 December 2020) for Russian tax residents individuals.

Ad-hoc tax disclosure (Audit)

When submitting the per-country of residence information to CBL, the customer must make sure that the final beneficial owner holds documents certifying his tax residency status as at the income payment date, as, pursuant to the Russian Tax Code, the tax residency status of a beneficiary of income must be specified in summary information on the basis of documents certifying such tax residency status.

Customers are responsible to comply with the obligations of articles 214.8 and 310.2 of the Russian Tax Code and provide the documentation as described below.

In accordance with article 214.8 of the Russian Tax Code, in the course of an office audit and/or field audit conducted to ensure the accuracy of tax calculation and payment by a Withholding Agent with respect to foreign nominee securities accounts in accordance with article 214.6 of the Russian Tax Code, tax authorities may request the following documents:

  • A copy of identification documents of the individual who, as at the date determined by the Russian organisation’s decision to pay income on the securities, was authorised to exercise the rights attached to the securities issued by such Russian organisation;
  • A copy of identification documents of the individual on whose behalf the trustee, as at the date determined by the Russian organisation’s decision to pay income on the securities, was authorised to exercise the rights attached to the securities issued by such Russian organisation;
  • A copy of documents and original documents certifying that the individual, as at the date determined by the Russian organisation’s decision to pay income on the securities, was authorised to exercise the rights attached to the securities issued by such Russian organisation, and documents certifying the tax residency of such individual; and
  • Other documents proving the accuracy of tax calculation and payment, including documents proving the accuracy of information disclosed by the foreign nominee.

Where a DTT provides for any limitation of tax privilege, the Russian Tax Authorities may request that the taxpayer provide (at the time of filing documents certifying the taxpayer’s tax residency status) an additional certificate issued (in any form) by a competent authority to certify that the taxpayer claiming tax privilege under the DTT is eligible to make such claim.

In accordance with article 310.2 of the Russian Tax Code, in the course of an office audit and/or field audit conducted to ensure the accuracy of tax calculation and payment by a Withholding Agent with respect to foreign nominee securities accounts in accordance with article 310.1 of the Russian Tax Code, the tax authorities may request the following documents in the manner stipulated by the Russian Tax Code:

  • A copy of documents evidencing the state registration and full name of the organisation that, as at the date determined by the Russian organisation’s decision to pay income on the securities, was authorised to exercise the rights attached to the securities issued by such Russian organisation;
  • A copy of documents evidencing the state registration and full name of the organisation on whose behalf the trustee, as at the date determined by the Russian organisation’s decision to pay income on the securities, was authorised to exercise the rights attached to the securities issued by such Russian organisation;
  • A copy of documents and original documents certifying that the organisation, as at the date determined by the Russian organisation’s decision to pay income on the securities, was authorised to exercise the rights attached to the securities issued by such Russian organisation, and documents certifying the tax residency of such organisation; and
  • Other documents proving the accuracy of tax calculation and payment, including documents proving the accuracy of information disclosed by the foreign organisation acting on behalf of third parties.

Eligible beneficial owners

Eligible beneficial owners

Relief at source

Quick refund

Standard refund

DTT residents

Yes

Yes

No

Tax exempt entities recognised by Russian law

Yes

Yes

No

Russian residents

Yes

Yes

No

Availability of tax relief

Relief at source of withholding tax is available for eligible beneficial owners only if the appropriate documentation is submitted to Clearstream Banking by the prescribed deadlines.

A quick reclaim of withholding tax is available if relief at source has not been obtained by an eligible beneficial owner.

No standard refund is currently available via Clearstream Banking for Russian equities.

Click on the image for a larger view of the diagram showing the availability of relief at source and/or reclaim on withholding tax on income from Russian equities.