In March 2018, the Ministry of Finance (MoF) clarified the application of the 0% (CIT) rate to dividends received by a company in reorganization.

According to article 284(3.1) of the Tax Code, a tax rate of 0% is applied to dividends received by a Russian company from another Russian company (participation exemption), provided the recipient company holds a minimum participation of 50% of the capital in the distributing company and the participation has been held continuously for at least 365 days.

According to Article 57 of the Civil Code of the Russian Federation, a legal entity is considered reorganized, except for cases of reorganization in the form of accession, from the moment of state registration of legal entities created as a result of reorganization.

Article 16 (2) of the Federal Law No. 129-FZ of 08.08.2001 “On State Registration of Legal Entities and Individual Entrepreneurs” establishes that the reorganization of a legal entity in the form of a transformation is considered complete from the moment of state registration of a newly emerged legal entity, and the transformed legal entity – their activities.

Thus, considering that a new legal entity arises during the transformation, for the purposes of the Tax Code of the Russian Federation such an organization will be a new taxpayer, therefore, the term of ownership of shares in the authorized capital of such an organization specified in subparagraph 1 of paragraph 3 of Article 284 of the Tax Cod, will be calculated for the newly established organization from the moment of its state registration.