Dividend payments to foreign companies fell three times

In 2022, Russian companies transferred ₽1.1 trillion in dividends to foreign shareholders, almost three times less than in 2021. Investors from the usa accounted for the most , and dividends to Cyprus fell three times, follows from the data of the Federal Tax Service

At the end of 2022, the amount of dividends payable to foreign organizations amounted to RUB 1.1 trillion. This is almost three times less than what was paid at the end of the previous year - 2.9 trillion rubles. Such data are contained in the reports of the Federal Tax Service, which were studied by RBC.

In the statistics of the Federal Tax Service, only those countries are specified, whose residents account for the largest payments. Among them, dividends in favor of Cypriot companies decreased most significantly over the year, three times - from 618 billion to 210 billion rubles. The largest volume of dividends from Russian companies falls on investors from the United States - 416 billion rubles. against 607 billion rubles. in 2021. For residents of the Netherlands, Great Britain , Germany, Switzerland, the amount of dividends decreased by about half. All these countries, after the introduction of Western sanctions against RUSSIA, are included in the list of unfriendly jurisdictions. The amount of dividends in the "other countries" column for 2022 decreased slightly compared to 2021 - from 706 billion to 674 billion rubles.

The statistics of the Federal Tax Service take into account payments as of January 1 of each year, that is, the amounts are calculated upon the fact of their transfer on this date, and not according to the decision of the shareholders of Russian companies on payments. In March 2022, the Russian authorities established a temporary procedure for fulfilling obligations on financial instruments to foreign persons from unfriendly states, in particular, for the payment of dividends. The new rules provide for the use of special type C accounts opened for non-residents in authorized banks. Money can be transferred to them only in rubles. it is impossible to withdraw funds from the account, it can only be directed to a limited range of purposes, such as paying taxes or buying federal loan bonds. At the same time, the Central Bank and the Ministry of Financemay issue a separate permit for crediting such profits to a regular account or for converting rubles into foreign currency.

Why Foreign Dividends Decreased

The main reason for the reduction in the volume of dividends to foreign companies was the sanctions against Russia and retaliatory measures, the experts interviewed by RBC were unanimous. After the outbreak of hostilities in Ukraine and the imposition of Western sanctions against Russia, difficulties arose with the financial infrastructure: disruption of communication with the Euroclear and Clearstream clearing systems, retaliatory measures by the Central Bank to limit the withdrawal of currency from the country, including for Western investors, EU sanctions against the National Settlement Depository (since June 2022).

The Central Bank only once, in November 2022, disclosed the amount of funds held in type “C” accounts with NSD, at that time it was estimated at 280 billion rubles. According to analyst Viktor Tunev, by the beginning of 2023, up to 1 trillion rubles could accumulate in the accounts. dividends and coupons paid to investors from unfriendly countries.

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In March 2023, at the RSPP congress, President Vladimir Putin proposed to work out the issue of easing restrictions on dividends from Russian business for companies from unfriendly countries, if we are talking about bona fide partners. RBC sent requests to the Central Bank and the Ministry of Finance.

The downward dynamics of dividends can also be associated with one-time factors, for example, the decision of companies not to pay dividends, Timur Nigmatullin, investment consultant at FG Finam, argues. Dividend payments could be affected by weak profits of companies, including due to sanctions pressure, adds Alexander Tsyganov, DIRECTOR of the Investment and Corporate Business Department at Tsifra Broker.

In 2022, a number of Russian companies refused to pay dividends. According to the results of 2021 (payments should have come in 2022), banks did not pay dividends, and Gazprom refused to pay part of the payments. Metallurgists NLMK and MMK, companies doing business in Russia but registered abroad, X5 Retail Group, TCS Group (the main asset of Tinkoff Bank), Polymetal, Headhunter, VEON, Fix Price and others did not pay dividends at the beginning of the year .

The sharp reduction in dividends to Cyprus could be due to the fact that the majority shareholders, who often control Russian companies through Cypriot structures, in such a situation could refuse to pay in order to optimize the ownership structure and make payments later, suggests an expert on the stock market "BCS World of Investments » Dmitry Puchkarev. As for US residents, they are more often minority shareholders in Russian companies, which means that their position on the issue of dividends is not decisive, he says.

Impact on taxes

Dividends paid to organizations are subject to income tax. Reducing their volume will lead to a decrease in tax revenues from this source, say Elena Strokova, an expert at Kontur.Schools, and Daria Kamenskaya, senior lawyer at the International Law and Taxes practice at Lemchik, Krupsky and Partners law firm.

Depending on the jurisdiction where the dividends are paid, the tax rate payable in Russia is determined. The base rate is 15%, but in the presence of a double taxation treaty (DTA), it can be reduced to 5, 10 and 0%. For example, the agreement with Cyprus was denounced from 2021, and the tax rate on interest and dividends from Russia was raised to 15%. “We can conditionally talk about a reduction in tax revenues in the amount of 5 to 15% of the difference between the amounts of dividends paid in 2021 and 2022 (that is, from 1.8 trillion rubles -),” says Kamenskaya.

However, according to the expert, from an economic point of view, "Russia has gained more than it has lost" from the application of restrictions on dividend payments to foreign companies. “A very large amount of cash remained in the country, which prevented the negative economic consequences that could occur due to a sharp outflow of capital from the country,” she concludes.

RBC sent a request to the Federal Tax Service.