The Duma has expanded tax benefits for transactions with securities of high technology companies


Moscow. December 18. The state Duma meeting on Friday adopted in the third reading the law providing for the extension of tax benefits for transactions with securities of Russian high-tech companies.

The law proposes not to levy personal income tax income received from the sale of shares, bonds and investment shares of high-tech companies. This exemption is valid provided that the maturity date of shares, bonds and units continuously belonged to the taxpayer for more than one year. These changes will be effective upon the law’s entry into force until 31 December 2022, after which will enter into force the current regulations.

According to Executive Director of market innovations and investments of the Moscow stock exchange Gennady Margolit, the tax incentives will be a major stimulus for innovative and technological companies enter the public market and attract investors.

“Of course, this benefit would be much more efficient in a growing market, but the interest of the company, despite the difficult situation on the market, still showing good growth rates. In this case, investors have incentives to buy securities of these companies,” said Margolit.

He noted that there are currently 10-15 interesting high-tech and fast-growing companies that have strong cash flow and clear investment idea. These companies can benefit from input tax exemptions.

“It’s easier for them to reach IPO, and to generate a liquid market. It is very important that this benefit is tied to the exchange. That’s right, because in our conditions it is difficult to find incentives for the company to become completely transparent, fit all the requirements of corporate governance, as it is a financial and psychological costs,” said Margolit.

Currently in the sector of Innovations and investments Moscow exchange traded stocks, bonds and funds 30 innovative and technological companies.

In the current legislation the possibility of the application of the zero rate tax on income of physical persons and on profit of organizations income derived from the sale of shares and participatory interests in the Charter capital of Russian organizations, provided that the ownership by the taxpayer by right of ownership or another proprietary right for more than five years. In respect of shares traded on the organized securities market, the law establishes that such shares must be shares of high-tech (innovative) sector of the economy.

At the same time in the list of securities that are covered by the law, includes bonds issued by high-tech companies and investment shares of mutual funds, which also belongs to the tools of the high-tech sector and serve as a source of financing innovative projects.

Due to the fact that the average duration of the transition of the project from one stage of development to another is from one to two years, five years to own shares of innovative companies does not match the investment horizon on a public stock market, which practically negates the stimulating function of this rule, stated in the explanatory note to the document. Moreover, the existing mechanism, establishing a five-year period of ownership of such securities, significantly reducing the inflow of investments in innovative companies in contrast to the traditional sectors of the economy.

In addition, the law exempts from personal income tax revenues in the form of the outstanding amount, from the requirements of the payment which the taxpayer is relieved as part of the procedure of bankruptcy of physical persons. Exempt from personal income tax also the proceeds from the sale of the property subject to implementation in the case of recognition of a taxpayer bankrupt.

In addition, personal income tax will be exempt income in the form of a mortgage debt in the event the mortgage loan under the government programme of assistance to mortgage borrowers, as well as in the event of termination of obligations under loan Bank collateral for the loan.

The Tax code also specifies the procedure of exemption from the income tax funds aid veterans and home front workers of the great Patriotic war, former prisoners of Nazi concentration camps and prisoner of war. In the current edition of the NC provides that exempted from personal income tax assistance in an amount not exceeding 10 thousand rubles. The law exempts from tax all the help rendered at the expense of means of budgetary system of the Russian Federation, funds of foreign States. Assistance by other persons is exempt from personal income tax in an amount not exceeding 10 thousand rubles.

The document was adopted entitled “On amending part two of the Tax code of the Russian Federation”.