RBC: the Ministry of Finance thought about changing the procedure for withholding personal income tax from coupon income
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The Ministry of Finance is considering changing the scheme for withholding personal income tax (PIT) from the accumulated coupon income (ACI) on bonds, the portal reported. RBC Investments.
“The issue of the possibility of accounting for the cost of purchasing a bond in terms of accumulated interest (coupon) income is currently being considered by the Ministry of Finance as part of the ongoing work to improve tax legislation,” the Ministry of Finance said.
Accumulated coupon income is a part of the interest income on a bond, which is calculated in proportion to the number of days that have passed since the moment the bond was issued or the previous date of payment of interest income. When selling a bond, the seller receives from the buyer the accumulated income in proportion to each day of holding. At the same time, the investor who buys the bond pays personal income tax on the full amount (the tax, which is 13% or 15%, is withheld by the broker). You can return the difference at the end of the tax period.
According to Aleksey Ponomarev, a member of the Association of Bondholders (ABO), withholding personal income tax from the coupon amount at the time of crediting to a brokerage account often leads to the fact that the tax amount is several times higher than the real financial result of the investor from the transaction.
“Taxation of coupons should be carried out according to the rules established for income from securities, that is, the tax is withheld at the end of the year, based on the overall financial result for all operations. Only in the case of transferring coupons to a bank account, tax should be withheld at the time of such payment,” Mr. Ponomarev believes.
He also points out that ABO has repeatedly drawn the attention of brokers to the fallacy of the current procedure. The same referred to the letters of the Ministry of Finance, where, according to the interlocutors of the association, this is exactly the procedure for taxation.
According to the letter of the department No. 03-04-06 / 96988 dated 11/30/2021 addressed to the AVO referred to by RBC Investments, the calculation and payment of personal income tax must be made when income is paid, while the payment is recognized as either the payment of cash or the transfer of cash funds to a bank account. The Federal Tax Service takes a similar position.
The start of 2023 proved to be successful for all classic financial investments. The best dynamics was demonstrated by investments in mutual funds focused on investments in foreign high-tech companies. Shares of Russian companies also brought high income.
Read more about the most successful investments of the beginning of 2023 in the Kommersant publication “The Stock Exchange is Calling”.
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