Effective from 1 January 2015 the current 30% tax rate applicable to dividend payments in case of non-disclosure of aggregate tax information to the local tax agent in accordance with the Russian Tax Code, will be no longer applied.
For the purposes of obtaining tax relief at source on dividend payments, the aggregate information on the entitled investors with respect to the securities held on the accounts of Foreign Nominee holders, Foreign Trustee holders and DR holders must be disclosed to the Russian depository acting as tax agent. The information to be provided should include:
• aggregate number of Russian securities belonging to the entitled investors
• tax jurisdiction of the entitled investors
• type of holders: individuals or legal / non-legal entities
• basis for tax relief (with reference to a particular Double Taxation Treaty, where applicable)
These changes are applicable to dividend payments only. In case disclosure is not provided, the statutory rate of 15% will apply (subject to receiving further clarifications).
Impact on investors: From the beginning of 2015 dividend income will no longer be subject to 30% penalty tax rate in case of non-disclosure.