14.04.09

The FTS explained in a letter dated March 19th that recipients of dividends from such companies must classify it as non-recurring income.  Therefore, they must pay a 20% profit tax, not the 15% profit tax for dividends. For citizens who received dividends, the income tax rate is increasing from 9% to 13%.

According to an official of the Ministry of Finance, this is the correct approach: if there is no profit at the end of the year, then there can be no talk of dividends. Companies must file an adjusted return and may be subject to penalties and fines. However, the recipients of the dividends will be obligated to pay the remainder of the tax.

This is not the tax specialists’ first attempt to re-categorize one tax base to another. The Supreme Arbitration Court, in a case involving TRUST National Bank, forbade tax specialists from calculating gains and losses according todifferent profit tax bases. Lawyers believe courts may put a stop to  the practice of re-categorizing dividends since it goes against corporate legislation.

If there is no profit, there is nothing from which to pay dividends, agrees Andrei Drozdov, a member of TRUST’s Board of Directors. But according to him, this problem should be dealt with by the companies. Dividend beneficiaries, who might have already sold shares, should not have to pay for companies’ mistakes.

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Source: "Vedomosti"