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Foreign Investors Selling Russian Shares: Tax Treatment


There have been recent amendments to the Russian Tax Code which create favourable tax conditions for foreign investors selling Russian shares. Taxand Russia identifies the changes to the regulations, and the impact this could have on foreign investors.

By the old rules of the Russian Tax Code, profits from selling Russian company shares were to be treated as taxable income within Russia. This rule related to shares of Russian Companies, whose assets consisted of immovable property situated more than 50% in the Russian Federation, and to derivatives, which were based on such shares.

The new rules mean that profits from selling Russian company shares, whose assets are situated 50% or more in the Russian Federation, and to derivatives which are based on such shares, will not be treated as income generated from within the Russian Federation.

Taxand's Take

The described changes are of importance to foreign investors selling Russian company shares. Today, if a foreign investor gains an income from selling Russian Company shares, such income will not be recognised as income sourced from the Russian Federation. Such income will therefore be untaxed in the Russian Federation.

Your Taxand contacts for further queries are:
Andrey Tereschenko
T. +7 495 967 00 07

Ivan Zelenin
T. +7 495 967 00 07

Taxand's Take Author