Goltsblat BLP advises that the President has signed Federal Law
No. 286-FZ of 30 September 2017 modifying Article 251 of the
Russian Tax Code, among other legal rules.
Under the law, income derived by companies and partnerships from
members (shareholders) increasing the entity's net asset value
by reducing or terminating its obligations to the members
(shareholders) is no longer exempt from corporate profit
tax1. This tax exemption is replaced by another one,
granted only for contributions to the entity's property in
compliance with the civil legislation.
The Tax Code changes come into effect on 1 January
2018.
This means that, starting from the next tax reporting period,
income generated by a shareholder (member) forgiving a
subsidiary's debts without a simultaneous increase in its
authorised capital will be subject to corporate profit tax.
