What happened?

Since July 2023, private foundations have been able to apply the preferential 15% rate (instead of 25%) if 90% of their income consists of a closed list of income types set out in Article 284.12 of the Russian Tax Code.

But in March 2025, the Ministry of Finance stunned the market with Letter No. 03-03-07/27539, stating that income from Russian shares and equity interests is taxed at the standard 25% rate. This put investments in Russian companies by private foundations as structures at risk.

A new turn

In June 2025, the Ministry of Finance issued Letter No. 03-03-04/55121, in which it allowed income from the sale of Russian shares and equity interests to be taken into account when determining eligibility for the preferential 15% rate.

Why is this important?

• Private foundations can now freely trade Russian shares and equity interests while retaining the benefit of the 15% rate.

• The instrument becomes more attractive for investor-settlors.

• The restrictions that had “frozen” portfolios of Russian assets due to the absence of tax benefits are being lifted.

• Investors will be able either to sell equity interests at the foundation level at the 15% rate or to use the tax-free sale benefit (upon re-transfer of the equity interests/shares to themselves), if the holding period for equity interests/shares in Russian entities exceeds 5 years (including holding through a private foundation) and the sale amount does not exceed RUB 50 million.

Bottom line

Private foundations are back in the game. This is excellent news for those structuring capital through private foundations: the question of whether it is advisable to contribute equity interests or shares in Russian companies to such a structure is no longer on the agenda.

ALPINE Tax is ready to help you structure assets through a private foundation and support you at every stage, from establishment to ongoing management.