Russian Eurobonds may become exempt from withholding tax
On 3 July 2013, the lower house of the Russian parliament (the State Duma) approved, in the second reading draft, several amendments to the Russian Tax Code, including the permanent abolition of the withholding tax on interest paid on Russian Eurobonds beyond 2013 with no time constraint.
According to the current regulations, withholding tax has been waived until the end of 2013 on Eurobonds issued between 1 January 2007 and 1 January 2014 only.
The amendment currently under review by the State Duma is intended to exempt from withholding tax interest paid out on all tradable Eurobonds to beneficial owners registered in countries that have a valid double tax treaty with Russia.
To be eligible for tax exemption, the tradable Russian Eurobond should also:
- Be listed and traded on a foreign stock exchange; and/or
- Be held in safekeeping by a depository/clearing organisation.
Furthermore, such foreign stock exchange and/or depository/clearing organisation must be included in the list approved by the Russian Federal Service for Financial Markets (the FSFM) and the Russian Ministry of Finance.
We continue to monitor developments and will inform customers as soon as further details or official confirmation become available.
| This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A., its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions reflected herein. The information in this Taxflash does not constitute legal or tax advice. |