The Federal law repealing the tax on foreign investors’ income from the sale of shares traded in the on-exchange market has been signed by Russian President Dmitry Medvedev.
The adoption of this law significantly improves the attractiveness of the Russian on-exchange share market for non-resident investors and simplifies the performance of the tax agent’s duties by Russian brokers with regard to foreign investors.
The abolition of the tax on foreign investors’ income from the sale of shares applies to legal relations arising from 1 January 2011, which reinforces its positive impact on the Russian market.
However, these changes do not apply to bonds, shares of investment funds and RDRs traded on Russian exchanges.
Thus, the Government has abolished the tax on foreign investors’ income from the sale of listed and non-listed shares.
According to the MICEX President Ruben Aganbegyan, favorable changes in the tax law will facilitate the inflow of foreign investors to the Russian stock market, help to improve the liquidity of companies’ shares and contribute to strengthening the cooperation between the Exchange and market participants in the course of creating an international financial center in Moscow.