Russia: Withholding tax abolished on government securities
Effective
1 August 2012
the withholding tax on domestic government securities issued before 1 January 2014 and held by foreign holders will be abolished.
Background
On 1 July 2012, the Russian government published amendments to the tax regulation associated with Russian withholding tax that apply to coupon proceeds of Russian government securities.
According to the amendments, the withholding tax on domestic government securities held by foreign holders will, as from 1 August 2012 and until 2014, be temporarily abolished at the level of custodians.
This measure was introduced in order to bring the taxation regime for government securities into line with that of Russian government Eurobonds, where foreign holders also are not taxed by Russia.
Note: The taxation treatment of other Russian securities remains unchanged.
Impact on customers
As of 1 August 2012, interest on OFZ bonds will be paid gross by Clearstream Banking1. No action is required from customers to ensure that no withholding tax is deducted with regard to such securities.
Important note:
The above interpretation of the amended law has been passed to us by our Russian custodian and no official clarifications from the Russian Tax Authorities and/or detailed comments from external advisors could be obtained with regard to any new provisions. Therefore, we cannot exclude the possibility of opinions of a different emphasis from those of our Russian custodian.
We continue to monitor the progress of the legislation and will provide further information as it becomes available.
Further information
For further information, customers may contact the Clearstream Banking Tax Help Desk on:
| Luxembourg | Frankfurt | |
| Email: | tax@clearstream.com | tax@clearstream.com |
| Telephone: | +352-243-32835 | +49-(0) 69-2 11-1 3821 |
| Fax: | +352-243-632835 | +49-(0) 69-2 11-61 3821 |
or Clearstream Banking Customer Service or their Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in the Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).
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