On January 1, 2025, a change in the tax legislation of the Russian Federation came into force: the innovation significantly affected the taxation of personal income tax on income from the sale of shares in the authorized capital of Russian organizations.
How was it before?
1. Until January 2025, the law exempted from taxation income earned by individuals from the sale of shares and stakes in the authorized capitals of Russian companies if they had been owned by them for more than five years.
This benefit was introduced by Federal Law No. 395-FZ "On Amendments to Part Two of the Tax Code of the Russian Federation" dated December 28, 2010 to stimulate long-term investments in the Russian economy and the development of the stock market.
2. The income received from the sale of shares and stakes in the authorized capitals of Russian companies was attributed to the main tax base (Clause 9, clause 2.1, Article 210 of the Tax Code of the Russian Federation), with the application of the tax rate under clause 1, Article 224 of the Tax Code of the Russian Federation:
What has changed since January 1, 2025?
Acsour experts highlighted the changes that came into force on January 1, 2025 for tax residents and non-residents of Russia.
Changes for tax residents:
1. From January 1, 2025, the income of residents from the sale of shares in the authorized capital of Russian organizations will be subject to a progressive scale of taxation.
Thus, the income of residents from the sale of shares in the authorized capital of Russian organizations (clauses 7, 8, clause 6 of Article 210 of the Tax Code of the Russian Federation as amended on 01.01.2025) will be subject to the tax rate provided for in clause 1.1 of Article 224 of the Tax Code of the Russian Federation (as amended on 01.01.2025):
2. Exemption from personal income tax in respect of income from the sale of shares in the authorized capital of Russian organizations if they have been continuously owned for more than 5 years (Clause 17.2 of Article 217 of the Tax Code of the Russian Federation) is significantly limited. Thus, the exemption from personal income tax will apply only to income that does not exceed 50 million rubles for the tax period. If the income exceeds this amount, the difference is subject to taxation at a rate of 13%.
3. Since from 2025 the income from the sale of shares in the authorized capital of Russian organizations will cease to relate to the main tax base, standard and social tax deductions cannot be applied to such income (clauses 9, 2.1, 3, 7, 8, 6, art. 210 of the Tax Code of the Russian Federation as amended on 01.01.2025).
Changes for tax non-residents:
Starting in 2025, non-residents will not be exempt from personal income tax in respect of income from the sale (repayment) of shares in the authorized capital of Russian organizations with continuous ownership for more than 5 years (Clause 17.2 of Article 217 of the Tax Code of the Russian Federation as amended on 01.01.2025).
Acsour experts note that for most small and medium-sized investors, this change will not be significant, but larger investors and entrepreneurs will be required to pay additional taxes.
The tax reform has fundamentally changed the taxation system in Russia. Acsour experts point out that the process of adapting to new legal requirements often leads to significant financial risks. Our experts will be glad to help you with any tax issues.
How was it before?
1. Until January 2025, the law exempted from taxation income earned by individuals from the sale of shares and stakes in the authorized capitals of Russian companies if they had been owned by them for more than five years.
This benefit was introduced by Federal Law No. 395-FZ "On Amendments to Part Two of the Tax Code of the Russian Federation" dated December 28, 2010 to stimulate long-term investments in the Russian economy and the development of the stock market.
2. The income received from the sale of shares and stakes in the authorized capitals of Russian companies was attributed to the main tax base (Clause 9, clause 2.1, Article 210 of the Tax Code of the Russian Federation), with the application of the tax rate under clause 1, Article 224 of the Tax Code of the Russian Federation:
- 13% in respect of income up to 5 million rubles (inclusive) for the tax period
- 15% in respect of income exceeding 5 million rubles for the tax period.
What has changed since January 1, 2025?
Acsour experts highlighted the changes that came into force on January 1, 2025 for tax residents and non-residents of Russia.
Changes for tax residents:
1. From January 1, 2025, the income of residents from the sale of shares in the authorized capital of Russian organizations will be subject to a progressive scale of taxation.
Thus, the income of residents from the sale of shares in the authorized capital of Russian organizations (clauses 7, 8, clause 6 of Article 210 of the Tax Code of the Russian Federation as amended on 01.01.2025) will be subject to the tax rate provided for in clause 1.1 of Article 224 of the Tax Code of the Russian Federation (as amended on 01.01.2025):
- 13% in respect of income up to 2.4 million rubles. (inclusive) for the tax period
- 15% in respect of income exceeding 2.4 million rubles for the tax period.
2. Exemption from personal income tax in respect of income from the sale of shares in the authorized capital of Russian organizations if they have been continuously owned for more than 5 years (Clause 17.2 of Article 217 of the Tax Code of the Russian Federation) is significantly limited. Thus, the exemption from personal income tax will apply only to income that does not exceed 50 million rubles for the tax period. If the income exceeds this amount, the difference is subject to taxation at a rate of 13%.
3. Since from 2025 the income from the sale of shares in the authorized capital of Russian organizations will cease to relate to the main tax base, standard and social tax deductions cannot be applied to such income (clauses 9, 2.1, 3, 7, 8, 6, art. 210 of the Tax Code of the Russian Federation as amended on 01.01.2025).
Changes for tax non-residents:
Starting in 2025, non-residents will not be exempt from personal income tax in respect of income from the sale (repayment) of shares in the authorized capital of Russian organizations with continuous ownership for more than 5 years (Clause 17.2 of Article 217 of the Tax Code of the Russian Federation as amended on 01.01.2025).
Acsour experts note that for most small and medium-sized investors, this change will not be significant, but larger investors and entrepreneurs will be required to pay additional taxes.
The tax reform has fundamentally changed the taxation system in Russia. Acsour experts point out that the process of adapting to new legal requirements often leads to significant financial risks. Our experts will be glad to help you with any tax issues.
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