Taxation

The taxation is considered to be an utterly important issue, as it influences the final amount of income the Investor gains. One should understand that until the investors’ assets are allocated in the Fund they are not subject to taxation. Tax is levied on the investors’ income from:

  • sale of the Fund’s securities to the third party (not Fund);
  • sale of the Fund’s securities to the same Fund (i.e. buyout of securities by the Fund at its market exit, on the motion of the investor upon the relevant decision taken by the Supervisory Board of the Fund, on any day for open-end funds and on the date, mentioned in the issue prospectus for interval funds);
  • distribution of dividends by corporate investment fund in case such decision has been taken during the General Meeting of Shareholders of the Fund.

In case of sale of securities of the Fund the difference between their purchase and sale price is subject to taxation. In case of dividend income, the amount of dividends received by the investor is subject to taxation.

Tax rate and taxation treatment vary depending on the nature of an investor (either individual or legal entity) and the source of income, as stated above. If the investor is a legal entity, the return on investment is subject to the rate of 25%. The taxation treatment of the legal entities’ income from securities transactions is regulated by the Law “On Corporate Income Taxation”.

The taxation treatment of income of investors as individuals is regulated by the Law “On Income Tax” and “On Corporate Income Taxation” (as related to the procedure of defining a tax base).

Income in the form of dividends of the Fund (see Section 3) and income from sale of securities of the Fund to the third party (see Section 1 and Section 3) is subject to the rate of 15%.