On August 25, 2025, the Bank of Russia published a draft regulation addressing the issue of increased taxation of investors during IPOs/SPOs. If the minimum quotation on the first day of trading was higher than the offering price, the investor received a "material benefit" on which taxes were levied, even though they were actually purchasing shares at market conditions.
Last year, we provided legal support for half of all public offerings of Russian companies. Drawing on our experience and deep understanding of the processes, we would like to comment on the Central Bank's initiatives.
Current tax legislation stipulates that a taxpayer's income received in the form of a material benefit is the material benefit from the acquisition of securities during the issuer's initial public offering. The tax base is determined as the excess of the market value of the shares over the taxpayer's actual acquisition costs.
At the same time, the Tax Code of the Russian Federation specifies that the procedure for determining the market price of securities is established by the Bank of Russia in consultation with the Ministry of Finance. Taking advantage of this right, the regulator proposed recognizing the placement price of securities during public offerings as the market price:
"In the case of the acquisition of securities during their placement through public offerings at organized auctions, the market price of the securities is determined as the actual placement price at which the taxpayer acquired the securities."
The implementation of the corresponding procedure for determining the placement price will resolve the issue of increased taxation during IPOs.