Russia: personal income tax on investments (NDFL)

Investment income in Russia is subject to personal income tax, withheld by the broker as tax agent in most cases. The rate is tiered: income up to an annual threshold is taxed at the lower rate and the excess at a higher one.

The most important relief for a long-term investor is the long-term ownership deduction, which exempts gains on qualifying securities held for more than three years, up to a limit that grows with each year of holding. This calculator applies that relief first and then the tiered rate.

Three years changes the arithmetic

For securities traded on a Russian exchange and held for more than three full years, the gain is exempt up to a ceiling calculated per year of ownership. For many private portfolios this removes the tax entirely, which makes the three-year mark a genuine planning date rather than a technicality.

The relief does not apply to positions held in every type of account, and selling one day early forfeits it completely. Where a holding is close to the mark, the cost of waiting is usually far smaller than the tax saved.

Who calculates the tax

A Russian broker acts as tax agent and withholds the tax at year end or on withdrawal, so most investors never file anything. Income from a foreign broker is declared by the investor, and the deadlines and penalties for missing them are strict.

Losses can be carried forward for ten years and offset against gains of the same category, but only if you declare them. A loss that is never reported cannot be used later.