Russia May Eliminate Capital Gains Tax For VC in High Tech
The Ministry of Economic Development has proposed a wide-ranging stimulus package to promote innovation in Russia, including eliminating capital gains for long-term venture capital investments and creating a special tax regime for innovative companies.
The Ministry of Finance proposed a far more modest stimulus package last month. MinFin’s proposal’s were mostly budget-neutral, and included updating the way in which r&d expenses were accounted for and limiting tax on insurance payments for exporters.
The Ministry of Economics proposal, on the other hand, provides a five year tax holiday for existing innovative businesses from proft taxes, land taxes and property taxes, voluntary adoption of VAT payments and fixed low monthly benefits payments per employee.
They propose to provide these benefits first to companies accredited by educational and scientific organizations, and to companies accredited by a self-regulating organization (SRO) of recognized professional venture investors, including the state-corporations Russian Venture Company and RosNano.
The Ministry of Economics proposed the exemption from capital gains tax once before, in November 2008. At that point it was to stimulate sale of shares in Russia, rather than through offshore entities. Now, the idea is to stimulate long-term investments in innovative companies. They propose to eliminate capital gains taxes on sale of shares regardless of exchange, provided the period of ownership is more than 5 years and the percentage ownership is over 10%.
[Via Kommersant]
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