ENDE
Announcement

Russia: New disclosure requirements

Tax | Russia

Reference

Code
A15239
Service level
CBL
Last Updated
21.12.2015

TAX HELP DESK LUXEMBOURG

E:

tax@clearstream.com

T:

+352-243-3 2835

F:

+352-243-63 2835

Effective

1 January 2016

the tax disclosure requirements will be amended as described below.

Background

The Federal Law N. 326-FZ, dated 28 November 2015, introduced changes to the Russian Tax Code with effect from the next financial year. In particular, articles 214.6 and 310.1 of the Russian Tax Code have changed in relation to the tax disclosure made by foreign organisations acting on behalf of third parties including foreign nominees.

Impact on Customers

Based on the clarifications received from the NSD (National Settlement Depository – the Russian CSD) and taking into account the Clearstream Banking’s1 Foreign Nominee Account Structure, as of 1 January 2016, the tax disclosure requested for securities held via Clearstream Banking depends on the eligibility, residency and status of the beneficial owners of the Russian securities. It may be split into the following 3 categories:

Category 1: Beneficial owners not eligible or not willing to apply for reduced tax rates

Applicable rates:

  • 20% for foreign legal entity not eligible/not applying for reduced tax rates but disclosed by foreign nominees for interest paid from corporate bonds.
  • 15% for foreign legal entity not eligible/not applying for reduced tax rates but disclosed by foreign nominees for interest paid from mortgage-backed bonds.
  • 30% for foreign individuals from taxable bonds (that is, corporate bonds or mortgage-backed bonds).
  • 15% for foreign legal entity and for foreign individuals not eligible/not applying for reduced tax rates but disclosed by foreign nominees for dividends paid from equities.1
  • 13% for Russian holders not eligible/not applying for reduced tax rates (that is, Russian individuals receiving dividends and/or interest from taxable bonds, and Russian legal entities receiving dividends).
  • 20% for Russian legal entities not eligible/not applying for reduced tax rates for interest paid from corporate bonds.
  • 15% for Russian legal entities not eligible/not applying for reduced tax rates for interest paid from mortgage-backed bonds.

Note: If the tax jurisdiction of beneficial owners is not disclosed in the payment of interest income on bonds of Russian issuers the tax rate 30% is applicable

To comply with the new disclosure requirements for this category, the Aggregated Tax Disclosure should include the tax jurisdiction of the securities holders, that is total holding per country of residence, legal status without specifying their names and without any reference to treaties or Russian Tax Code.

Category 2: Foreign beneficial owners eligible to treaty reduced rates or to tax exemption based on Russian legislation

Applicable rates:

  • Double Taxation Treaty rates (DTT).
  • 0% for Russian Tax Code.
  • 0% for supranational entities.

To comply with the new disclosure requirements for this category, the Aggregated Tax Disclosure should include the tax jurisdiction of the beneficial owner of the income (if they has the actual right to receive income), their legal status, the reference to the applicable article of the Russian Tax Code or to the applicable DTT. The names of the final beneficial owners continue not to be requested in the Aggregated Tax Disclosure submitted at source or for the quick refund.

Note: Clearstream Banking reminds customers that for dividends the NSD does not apply the minimum DTT rates if their application depends on substantial holding in the company’s capital, investment amount or period of holding.

Category 3: Russian legal entities applying for tax exemption on interest paid from taxable bonds

Applicable rates:

  • 0% on interest for eligible Russian legal entities.

To comply with the new disclosure requirements for this category, the Aggregated Tax Disclosure should include the Tax Identification Number of the eligible Russian legal entity being the beneficial owner of the income and its total holding, without disclosing its name. Furthermore, no reference to the applicable Russian Tax Code is requested.

Further information

For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.