Russia: Tax On Gains
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Tax Example: Capital Gains
PROPERTY VALUE ROSE 100% OVER A 10-YEAR PERIOD |
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| Non-resident couple's initial value of residential property | €250,000 | €2,000,000 | |
| Proceeds on Disposal1 | 500,000 | 4,000,000 | |
| = Taxable Income | €500,000 | €2,000,000 | |
| Income Tax Rates | |||
| Flat Rate | 30% | 150,000 | 1,200,000 |
| Annual Income Tax Due | €150,000 | €1,200,000 | |
| Tax Due as % of Gross Income3 | 30% | 30% | |
| Effective Capital Gains Tax Rate4 | 60% | 60% | |
Thanks to: |
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on July 23, 2008 .
Notes
1 No special rules for spouses are provided under the Russian tax law, so each spouse’s income is declared and taxed separately. In a case where the residential property is jointly owned by husband and wife (i.e. at the time the property is purchased, each spouse owns a proportion of the property according to the sale and purchase agreement), each spouse should separately pay tax on their share of income.
2 Non-residents are taxed at a flat tax rate of 30% on the gross sales proceeds, without deductions for cost acquisition or other expenses.
3 Gross income is assumed to comprise only of the proceeds from the disposal of the residential property.
4 Effective capital gains tax calculated as total tax payable as a percentage of the appreciation of the property (ignoring CPI inflation).
PROPERTY VALUE ROSE 3% PER ANNUM OVER 10 YEARS, COMPOUNDED |
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| Non-resident couple's initial value of residential property | €250,000 | €2,000,000 | |
| Proceeds on Disposal1 | 500,000 | 4,000,000 | |
| = Taxable Income | |||
| Income Tax Rates | € | € | |
| Flat Rate2 | 30% | ||
| Annual Income Tax Due | € | € | |
| Tax Due as % of Gross Income3 | % | % | |
| Effective Capital Gains Tax Rate4 | % | % | |
| Thanks to: |
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