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Jurisdictions and tax · paper 03

What happens to the money after a sale

Taxation of share disposals in Russia in 2026: the five-year exemption and its cap, rates above the cap, disposal by a corporate seller and the consequences of losing tax residency.

In brief. The personal income tax exemption on holdings of more than five years remains in force and, since 2025, is capped at RUB 50m of income per year; the excess is taxed at 13% and 15%. Loss of tax residency moves the disposal to a 30% rate applied to the full consideration, calculated without deduction of costs. For a corporate seller the 0% rate on five-year holdings is preserved in full and applies where real estate makes up half of the company's assets or less. All of these branches are settled before signing, while the choice of structure is still open.

Individual — Russian tax resident

Holding of more than five years

Article 217(17.2) of the Russian Tax Code exempts from personal income tax the proceeds of disposals of participation interests in Russian companies and of shares held continuously for more than five years. From 1 January 2025, Federal Law No. 176-FZ of 12 July 2024 introduced a limit: the exemption covers income up to RUB 50m per tax period.

Amounts above the cap fall into a separate tax base (Article 210(6)(8)) and are taxed on the two-step scale in Article 224(1.1): 13% on the portion of income up to RUB 2.4m and 15% on the balance. The five-step scale reaching 22% applies to other categories of income.

Holding of less than five years

The general rules apply: income is reduced by documented acquisition costs (Article 220), and the same 13% / 15% scale applies to the resulting base.

Individual — non-resident

Status is determined for the calendar year: presence in Russia of fewer than 183 days makes an individual a non-resident. The consequences for a share disposal arrive together:

  • The exemption stays out of reach. Article 217(17.2) is addressed to tax residents; for a non-resident the holding period loses relevance.
  • A 30% rate applies (Article 224(3)).
  • The base is the full consideration. Deduction of acquisition costs is available to residents.

The practical conclusion: the decision to relocate and the decision to sell are linked in timing and in consequence. Here the order of steps is worth more than the steps themselves.

Corporate seller

Article 284.2 preserves a 0% profits tax rate on interests held continuously for more than five years. A cap by amount, of the kind introduced for individuals, is absent here. The condition: Russian real estate makes up 50% or less of the assets of the company whose interests are being sold.

On a different asset composition or a shorter holding period, the gain (proceeds less documented costs under Article 268) is taxed at the general profits tax rate of 25% from 1 January 2025 (Article 284 as amended by Law No. 176-FZ).

Disposals of participation interests in Russian companies are exempt from VAT (Article 149(2)(12)).

Summary

SellerHolding periodRateBase
Individual, Russian residentover 5 years0% up to RUB 50m, then 13% / 15%exemption under Art. 217(17.2); excess under Art. 224(1.1)
Individual, Russian residentunder 5 years13% up to RUB 2.4m, then 15%income less documented costs (Art. 220)
Individual, non-residentany30%the full consideration (Art. 224(3))
Russian companyover 5 years0%full amount where real estate is 50% of assets or less (Art. 284.2)
Russian companyunder 5 years25%gain under Art. 268

Share sale or asset sale

These are two different agreements with different consequences, and the choice between them usually becomes a point of negotiation:

Share saleAsset sale
What transfersthe company in full, with its history and obligations only the selected assets
Historic riskpasses to the buyerstays with the seller
Usually preferred bythe sellerthe buyer
Seller's taxexemption available on a five-year holding tax at company level plus tax on extracting the proceeds

A buyer insisting on an asset purchase is most often seeking to leave the company's tax and litigation risk with the seller. The answer to that is a thorough vendor due diligence that addresses the concern.

Three mistakes that cost the most

  1. Calculating tax after signing. The structure of the transaction determines the tax. A signed agreement reduces the choice to zero.
  2. Overlooking the year of the change of residency. A move in the year of the transaction turns a zero rate into thirty per cent on the full amount — the most expensive of the common mistakes.
  3. Losing the evidence of acquisition cost. The deduction works where the supporting documents exist.

What we do here

The tax map of the transaction — the consequences of each structural option calculated before signing — sits in capital and structuring. Residency, capital allocation and life after the exit — private clients. A position on a specific transaction is prepared together with a specialist tax adviser.

Statutory basis
  • Russian Tax Code: Art. 217(17.2); Art. 224(1.1) and 224(3); Art. 210(6)(8); Art. 220; Art. 268; Art. 284; Art. 284.2; Art. 149(2)(12).
  • Federal Law No. 176-FZ of 12 July 2024 — introduction of the RUB 50m exemption cap and changes to the personal income tax scale and the profits tax rate from 1 January 2025.
  • Presidential Decree No. 618 of 8 September 2022 — approval of transactions involving persons connected with unfriendly states.
  • Provisions verified as at August 2026.

This material is informational and serves a reference purpose. Decisions on a specific transaction are taken on the basis of documents and together with a specialist adviser: every situation requires separate analysis.