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Investment Taxation for Expats in Russia

Submitted: January 2014

Taxable income in this category includes:

Interest

For residents, interest income from Russian sources is treated as ordinary income and taxed at the flat rate of 13%. It must be reported on your tax return. There is a higher 35% rate of tax on interest which is either above or below the Central Bank’s refinancing rate for roubles; or in the case of a foreign currency loan, if the interest rate is above or below 9%. If you are a resident you will also have to pay tax on interest from outside Russia, and may be subject to withholding taxes in the country of origin. If there is a suitable tax treaty, the tax rate can be significantly reduced. For non-residents taxpayers, interest income from Russian sources is treated as ordinary income and taxed as such at a flat rate of 30%.

Rental income

For a resident, rental income is taxed as ordinary income and must be reported with your tax return. Generally rental expenses cannot be deducted. If you are a resident, rental income from a country outside Russia must be reported on your tax return. You may be able to claim a foreign tax credit if this is specified in a tax treaty with the country where the property is located.

For non-residents, rental income that is from a Russian source is taxed as ordinary income at a rate of 30%.

Dividends

For residents, dividend income from Russian sources income is taxed as ordinary income at a rate of 9% and must be reported with your tax return.

For non-resident taxpayers, dividend income from Russian sources income is taxed as ordinary income at a rate of 15%, and must be reported with your tax return.

Capital gains

For residents, capital gains on real property and other assets, which have been held for less than three years, are taxed as ordinary income, and must be reported with your tax return. Capital gains on real property and other taxable assets held for three years or more are exempt from tax.

For non-residents, income tax at a rate of 30% is payable on the gross proceeds of the sale of all assets other than securities. For securities the acquisition cost and various other expenses, plus any taxes paid on purchase can be deducted prior to taxation.

 

 




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