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5.6. Qualification of Specific Income Categories for Tax Purposes

Dividend Income

The term “dividend” includes any income received (including interest from preference shares) from shares or rights (interest) as a result of a distribution of profits made by a legal person to its shareholders/ interest-holders in proportion of their shares/ right in the capital.

Interest Income

The term “interest income” includes any pre-declared (established) income (including a discount) from debt claims related to cash investments or debt obligations. The following shall be regarded as interest:

  • an amount payable in respect of a credit (loan), deposit, bond;
  • income from government securities and bonds, including the premiums and profits accrued on them; and
  • insurance compensation (amount) paid by the insurer to the insured under a pension insurance contract minus the insurance premiums paid for receiving such compensation.

Royalty Income

The term “royalty income” includes the following:

a) income received for the use or the right to use copyrights, software, patents, drawings, models, trademarks or other intellectual property or for transferring the right to another person;

b) income received for the right to use industrial, trade or research equipment or transferring the right to another person;

c) income received for the use of know-how;

d) income received for the right to use cinematography films, video films, audio records or other recording devices or for transferring the right to another person;

e) income received for the right to use a secret formula or process, as well as information containing industrial, commercial or scientific experience or for transferring the right to another person;

f) a fee for the right to use subsoil in the course of extracting minerals and processing anthropogenic formations; and

g) income received for providing technical assistance in connection with the rights provided for in this paragraph or from the waiver of these rights.