PRESS: Russian ministry asks for permanent 50% state co divs rule

MOSCOW, Jul 6 (PRIME) -- Russia’s Finance Ministry has proposed obliging state companies to pay 50% of net profit calculated under International Financial Reporting Standards (IFRS) in dividends every year starting from 2017, business daily Vedomosti reported Wednesday citing Deputy Minister Alexei Moiseyev.

The government earlier adjusted dividend payment rules for state companies obliging them to take the highest figure of a net profit for 2015 – under Russian Accounting Standards (RAS) or under IFRS – and allocate no less than 50% of the net profit for dividends. In fact, many companies managed to escape the new rule due to large-scale investment plans or low profit.

“This draft order has been prepared indeed and it is targeted at mobilization of budget revenue,” Moiseyev told the daily.

The ministry also offers to ask companies to pay dividends from their undistributed net profit if net profit calculated under RAS is lower than 50% of IFRS net profit.

The new regulation can contradict the Russian law in terms of dividend payment exceeding RAS net profit and obligatory payment from undistributed net profit, Deloitte’s Corporate Management Director Oleg Shvyrkov and Prosperity Capital Management’s Corporate Management Director Denis Spirin told the daily.

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