Charitable legacies to be tax-free?
14 January 2014
Ministry of Economic Development of the Russian Federation proposes making charitable legacies tax free
According to the newspaper Kommersant, the ministry has drafted a bill containing proposed amendments to the Federal Law on Charities and Charitable Activities designed to bring about the above. Contributions to endowments are included and the amendments may come into force this year. Bequests would be listed separately as a source of capital for a charity which would not be taxable. Hitherto there was a lacuna in the legislation which meant that in some cases government officials saw the inheritances received as being income liable to tax.
Kommersant reported the president of the Russian Aid Fund, Lev Ambinder, as saying:
‘Charitable legacies are commonplace in the West in contrast to Russia. Now it looks like the time has come for the law to be reformed.’
The bill will contain proposed amendments to the Law on the Procedure for the Formation and Use of the Endowment Capital of NGOs which would rule out the possibility of taxing funds donated by an organisation for the purpose of forming or adding to endowed capital. Furthermore, the amendments propose that income from the government is to be regarded as forming part of an endowment and thus not taxable.
The world over, leading businessmen and personalities have declared their intention to give legacies for charitable purposes. The Giving Pledge campaign initiated by American billionaires Bill Gates and Warren Buffet attracted the greatest public attention. Two Russian entrepreneurs and philanthropists also joined in. The first was the owner of Inteross and Norilsky Nikel, Vladimir Potanin, in February 2013. In December 2013 the co-owner of Mail.ru Group and DST Global, Yuri Milner, decided to do so too. He undertook to give half of his property to charity.
Author: Yulia Vyatnika