Putin Proposes Taxing Dividend Outflows to Offshores

Russian president Vladimir Putin has proposed the introduction of an up to 15% tax on the transfer of dividends to overseas accounts, OTR reported.

“All payments of gains in the form of interest and dividends, flowing from Russia abroad to offshore jurisdictions, shall be taxed appropriately. Two thirds of such funds now – and these are essentially revenues of specific individuals – have the tax rate of just 2% as a result of various schemes of the so-called ‘optimization’,” Putin said.

“Such a rate is unfair in conditions of the general individual income tax of 13%,” the head of state said. “Therefore, I propose to introduce for those withdrawing their gains as dividends to foreign accounts the tax rate for such dividends as 15%.”

Russia will withdraw from agreements unilaterally in case foreign partners do not accept new conditions, Putin cautioned. “We will start from the countries, through which significant resources of Russian origin are passing, being the most sensitive for our country,” the Russian leader added.

The president also proposed setting a 13% tax on interest income for citizens whose total bank deposits or investments in debt securities exceed 1 million rubles ($12,700).

“That is, I repeat, not the contribution itself, but only the interest earned from such investments will be taxed on the income of individuals,” Putin said in an appeal to the Russians.

The solution is connected with the difficulties in the economy provoked by the situation with the spread of COVID-19.

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