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Tax on dividends: why less arrives than was declared

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Tax on dividends: why less arrives than was declared — Taxes and the Russian IIA
Содержание · 4

A declared dividend is a pre-tax amount. Less reaches the account, and that is not a broker error.

The rate

For a Russian tax resident, 13% within the annual threshold of RUB 2.4m and 15% above it. Non-residents pay a separate rate on dividends from Russian companies.

What is special about the dividend base

It is computed separately from the base for securities transactions. Two consequences follow, both unwelcome.

A loss on selling shares does not reduce the tax on dividends. Long-term ownership relief does not extend to dividends — Long-term ownership relief: paying no tax without arranging anything in advance.

Dividends from foreign issuers

Here tax may be partly withheld abroad while the remainder has to be topped up in Russia by declaring the income yourself. The rules depend on the issuer's country and on whether a double tax treaty exists.

What it changes in a return calculation

The dividend yield shown on any screen is computed from the declared amount — that is, before tax. The real yield in hand is lower. When comparing a dividend-paying share with a bond, apply the same adjustment to both.

More on the payouts themselves: How dividends work on the Russian market and The dividend trap: why a record yield is a bad signal.

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Sources

  • Налоговый кодекс РФ, часть вторая, глава 23
Следующий шаг курса «Taxes for investors» · разборTax on coupons: how it changes the choice of bondCoupon income is taxed in full, which makes comparing issues by coupon rate even less meaningful.Читать дальше Предыдущий шаг: Investor income tax: what is taxed and when it is withheld
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