Taxation of shareholders

Shareholders receive dividends net of personal income tax charged and paid to the federal budget.

According to the Russian tax laws, taxing dividend income paid out by PJSC/JSC is mandatory as personal income tax. There are no exceptions to these laws.

The rate of personal income tax depends on the tax residency of shareholders**.

There are two rates for shareholders residing in the Russian Federation: if the annual income of an individual is not more than RUB 5 m, the rate stands at 13%; if it exceeds RUB 5 m, the rate is 15%.

For foreign residents, the basic rate of personal income tax is 15%. The rate may be reduced under a double tax treaty.

Personal income tax is charged and paid by a tax agent. If the rights to shares are recorded in the register of the Company’s securities / shareholders, the Company itself acts as a tax agent. Otherwise, this role may be assumed by a trustee, a broker, or a depository.

If dividends are paid more than once a year, personal income tax is calculated on a cumulative basis offsetting the amount paid earlier.

* Dividends are the Company’s net profit that can be distributed to shareholders according to their shareholding and type of shares.

** For more information about tax residencies, go to Russia's Federal Tax Service website at https://www.nalog.gov.ru/eng/