NAUFOR wants to simplify the transition of investors from one broker to another
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NAUFOR has developed amendments to the legislation on the transfer of customer data from one professional participant to another in order to calculate taxes. During the mass transfer in 2022, rules were in place that simplified the transfer of information. However, according to experts, hundreds of thousands of investors could face double personal income tax withholding. At the same time, the proposed changes do not completely solve the issue, lawyers say, and may lead to additional costs for brokers.
“Kommersant” got acquainted with the draft amendments developed by the National Association of Stock Market Participants (NAUFOR), on the transfer of documents from one professional participant to another. They amend the law “On the securities market” and the Tax Code. The amendments allow professional participants, at the request of a client, to receive data about him and his transactions from another professional participant in electronic form and take them into account when calculating income tax. Up to 60 days are allotted for data transfer, and the transfer standard itself is developed by the SRO and approved by the Central Bank. Now the document is considered by financial regulators.
Replacing a paper set of documents with the transfer of data in electronic form will simplify and speed up the process of submitting information and correctly accounting for expenses when determining tax amounts, explained Alexey Timofeev, President of NAUFOR. In order to tax not the entire proceeds, namely the income from the sale of securities, the investor gets the opportunity to request from the former broker a set of documents that confirm the information about the purchase, and provide them to the new broker for the correct calculation of the tax.
The introduction of blocking sanctions against the largest Russian banks directly affected the clients of their brokerage divisions and subsidiaries (see Kommersant dated March 16, 2022). Restrictions imposed by the European depositories Euroclear and Clearstream deprived them of the opportunity to dispose of foreign securities through sanctioned brokers. This led to mass transfers of clients to other professional participants. Moreover, with the expansion of sanctions on other financial organizations, the number of transferred persons increased (see Kommersant dated April 8, 2022).
The Bank of Russia says that “it is difficult to estimate the number of transferred investors due to the fact that the transfer process itself involved opening a second, third, etc. brokerage account with other brokers without closing the original brokerage account.” According to independent financial analyst Andrei Barkhota, the number of clients who changed brokers amounted to 1.2-2 million people (including repeated transitions). The Ministry of Finance did not respond to Kommersant’s request.
During the mass transfer of clients, it was not possible to generate sets of documents for each client in a limited time, therefore, registers were used, the possibility of switching through which was approved by the Bank of Russia, Alexey Timofeev notes. The amendments to the Tax Code adopted at the end of 2022, which made it possible to use information from registers for tax calculation to confirm the purchase prices of securities, were a temporary measure.
Even in this case, experts talk about the problem of repeated withholding of personal income tax. According to Dmitry Lesnov, Head of the Finam Client Service Development Department, several tens of thousands of clients could face accounting problems. atLegal partner Alexander Pavlovsky estimates the number of victims at several hundred thousand people.
Andrey Drozdov, the lawyer of Asnis and Partners, considers the assignment of the duty to transfer information and documents at the request of the investor, as well as the recognition of electronic document management, to the positive aspects of NAUFOR’s proposals. At the same time, in the event of an incorrect calculation of the tax base, the new tax agent will have to apply to the tax authority with all supporting documents attached, notes Alexander Pavlovsky.
At the same time, the sanctions issue called into question the cross-border verification of tax files. Hence, according to Andrei Barkhota, the main risk of the bills is that their implementation will not be able to completely solve the problem of double taxation for investors who have changed their broker. The Association of Bondholders proposes to halve the period for the transfer of documents. In addition, there is a need to guarantee the confidentiality of transmitted and processed information, says Alexander Pavlovsky, which inevitably leads to additional costs for brokers.
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