Basic regulations governing dividend payments
July, 09 2021

The Civil Code of Russia is the main document that regulates civil legal relations with the participation of individuals and legal entities, as well as public legal entities, and also establishes the basic rules and restrictions on dividend payments.

Further details of the legislative mechanisms of the procedure for making decisions on the payment of dividends, restrictions and time limits for such decisions, the form and deadlines of payment are established in the Federal Law "On Joint Stock Companies" and the Federal Law "On the Securities Market".

Controversial issues that may arise during the implementation of the dividend payment procedure are resolved in the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of November 18, 2003 N 19 (as amended on May 16, 2014) "On some issues of the application of the Federal Law "On Joint Stock Companies".

The resolution of the Supreme Arbitration Court of the Russian Federation mentioned above allows the following points: the competence of the management bodies to make decisions on payment, the deadlines of the payment of dividends, the conditions upon the occurrence of which the company is not entitled to accept and / or pay dividends, etc.

The Tax Code of the Russian Federation (parts one and two) considers dividends from a tax point of view, and gives us the answers to the following questions:

Firstly, what is meant by dividends by tax legislation, i.e. taxable base;

Secondly, what tax rates are set for dividend payments;

Thirdly, the mechanism for paying the established tax.

Answers to these questions help us understand possible ways of tax optimization when developing a company's dividend policy.



Alexander Mishchenlo


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