Amendments to the Russian Tax Code Effective from 1 January 2021 (taxation of income on Russian securities)

31 July 2020
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Attn.: NSD's Clients

Currently, the following types of income on Russian securities are exempt from personal income tax:

  1.  Coupon income on government bonds or other government securities of the former USSR, member states of the Union State of Russia and Belarus, and regions of the Russian Federation, as well as bonds or other securities issued by a decision of Russian local representative authorities (paragraph 25 of Article 217 of the Russian Tax Code).
  2.  Coupon income on Russian corporate bonds traded in the organized market, issued on or after 1 January 2017 and denominated in Russian rubles, provided that coupon income does not exceed the refinancing rate plus five percentage points, with personal income tax at the rate of 35% being applicable to the excess amount only (paragraph 7 of Article 214.1 of the Russian Tax Code; fifth sub-paragraph of paragraph 2 of Article 224 of the Russian Tax Code).

With effect from 1 January 2021, in accordance with Federal Law No. 102-FZ, paragraph 25 of Article 217 and the fifth sub-paragraph of paragraph 2 of Article 224 of the Russian Tax Code will cease to be in force.

In accordance with the amendments made by Federal Law No. 102-FZ to the Russian Tax Code, with effect from 1 January 2021, coupon income on Federal Loan Bonds (OFZ bonds), regional or municipal bonds, as well as Russian corporate bonds traded in the organized market, denominated in Russian rubles and issued on or after 1 January 2017, will be subject to personal income tax at the following rates:

  • 13% for Russian tax residents
  • 30% for non-Russian tax residents

If there are double taxation treaties (DTT) between Russia and the relevant foreign jurisdictions, foreign retail investors will pay personal income tax at the rates provided for in those DTTs.

At the moment, NSD is in talks with the Ministry of Finance of Russia, seeking to find out which tax disclosure formats will be applicable for foreign nominee holders of government or municipal securities, including OFZ bonds.

The options being discussed are disclosure of both legal entities and individuals (standard option) and disclosure of individuals only under Article 214.6 of the Russian Tax Code.

As soon as the Ministry of Finance replies to NSD's enquiry, further information will be posted on NSD's web site.


In case of any question related to this communication, you may contact your account managers by telephone (+7 495 956-27-90/91).

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