Investor income tax: what is taxed and when it is withheld

Tax reaches an investor in more than one form, and confusing the forms is the source of most unpleasant surprises in January.

Selling securities

Tax is paid on the gain: the difference between the sale price and the purchase price, less commissions. Until a security is sold there is no tax, however far it has risen.

The rate for a Russian tax resident is 13% within an annual tax base of RUB 2.4m, and 15% on the excess. The higher rate applies only to the part above the threshold, never to the whole amount.

Dividends

Tax is withheld at the moment of payment, before the money reaches the account. This base cannot be reduced by expenses or by losses on other transactions — it is computed separately.

Coupons

Taxed like other income from securities, and withheld either at payment or when money is withdrawn — the order depends on the broker.

When it is withheld

At the year end — in January of the following year — and also when money is withdrawn from the account during the year. The second case regularly catches people out: you withdraw a sum and receive less.

What reduces the tax

Losses on other trades in the same year — Offsetting losses: how a losing trade lowers the tax. The holding period — Long-term ownership relief: paying no tax without arranging anything in advance. A special account — The third-generation IIA: what it gives and what it restricts.