The authorities proposed a new mechanism for collecting taxes on coupon income

The government has submitted to the State Duma a bill amending the Tax Code, which should eliminate the problem of taxing income on bonds if an investor bought them on the secondary market. The document was published in the database of the lower house. It is expected that the law will come into force a month after the adoption. The Bondholders Association (ABO), which participated in discussions of the initiative, expects the adoption of the law no later than July, its representative said.

Now, when buying paper on the secondary market, an investor pays the “body” of the bond and the amount of the received accumulated coupon income (ACI) calculated on the day of the transaction. This income is part of the “round” coupon amount that has accumulated on a certain day after the payment of the past. It is calculated pro rata for each day of ownership. ACI from the previous owner of the bond is accrued to the investor upon purchase. But when the day of interest payments comes, the broker withholds personal income tax (13 or 15%) from the entire size of the coupon, although when calculating the final amount due to the investor, the ACI paid upon purchase is deducted from the value. The new owner receives a coupon minus the one paid at the time of the purchase of the NKD, but he has to pay tax on the full amount, explains Alexey Kovalev, an analyst at FG Finam.