The Ministry of Finance (MoF) has issued Letter No. 03-08-13/22654 on May 14, 2014 for clarifying the tax agents’ responsibilities of the securities depositories making transfers to Russian and foreign companies further to dividend distributions. The Ministry of Finance noticed that starting from January 1, 2014 certain changes to the federal laws governing the process for distributing the dividends became effective.
On the basis of article 24 of the Tax Code, the tax agents are obliged to withhold and remit taxes to the state budget and The Russian Company that distributes dividends is introduced as a tax agent with respect to the corporate income tax due on such dividends. According to the amended version of Federal Law No. 208-FZ, The dividends must be paid to a nominee or fiduciary not later than 10 working days from the date when the shareholders become eligible to receive the dividends and to other registered shareholders not later than 25 working days from that date. Finally, based on the article 275 of the Tax Code, the Ministry of Finance has concluded that the nominee or fiduciary, which opened the depository accounts for the owners, should be treated as an income source and should act as tax agent with respect to such dividends.
