OREANDA-NEWS.  National Settlement Depository presents its comments on the Federal Law “On Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation” signed by Russian President Vladimir Putin.

It is worth reminding that the Federal Law was adopted by the State Duma on 25 October 2013; on 30 October 2013, Russia’s Federal Assembly approved it.

The amendments change the procedure of fulfilling tax agent functions for income payments on Russian issuers’ securities on a cascading principle. Starting 1 January 2014, NSD will be acting as a tax agent both for Russian issuers’ bonds and shares.

The Federal Law introduces the key changes in Clauses 214.6 and 310.1 of the Tax Code; according to the updated clauses, the depository acting as a tax agent- shall calculate and withhold the tax for the income payments on securities from foreign organizations acting in the interests of the third parties.

When the tax agent pays income on securities kept on the foreign nominee holders’ depository accounts, it shall calculate and withhold the tax on the basis of the consolidated information submitted by the holders of these accounts, including the information about the countries of tax residence of legal entities and individuals.

If these depositors are entitled to tax abatements on securities pursuant to the Tax Code of the Russian Federation and Russia’s international agreements, they may submit additional information referring to the grounds for these tax abatements.

Within 25 business days, the foreign organizations acting in the third parties’ interests may clarify the consolidated information in order to re-calculate the withheld tax for reducing or increasing the tax amount. The first day shall be the day when the tax for income payments on securities is withheld.