Taxation of income from the financial instruments of Russian issuers

Investments in the financial instruments of Russian issuers entail additional obligations for the investor that are set forth in the normative acts of the Russian Federation which regulate taxation of the income from the financial instruments of Russian issuers.

Application of the Russian tax depends on the type of the financial instrument and the type of income paid, as well as on the country of tax residence of the client.

Clients - tax residents of the countries that entered into an international agreement on the avoidance of double taxation may qualify for a reduced tax rate on income from dividends and interest payments (coupon) of financial instruments of Russian issuers, which is specified in the international agreement on avoidance of double taxation between the two countries.

If all the necessary documents are submitted by client in due time, ABLV Bank, AS (hereinafter – the bank) will be able to take necessary measures for applying reduced tax rate to income from the financial instruments of Russian issuers, as set forth in the normative acts of The Russian Federation and in the international agreement on avoidance of double taxation. For tax benefits to be applied, the client should meet all requirements of the normative acts of the Russian Federation and the international agreement on avoidance of double taxation.

Application of reduced tax rates depends not only on the bank’s actions, but also on the conditions of cooperation between the bank and the respective agency company. There might be situations in which it will be impossible to apply reduced tax rate directly upon the payment of income on financial instruments of Russian issuers due to peculiarities of service rendering by the agency company. In addition, although the bank takes relevant and appropriate measures to apply the reduced tax rate, the bank does not guarantee that the reduced tax rate will be applied to all types of income and all clients.

In addition, we would like to inform that the bank does not provide advice on taxation matters, and this notice is for information only.