Taxation of Share Transfer

Shortly we would like to inform you about taxes applicable while transferring shares of ltd.

We will discuss two types of transfers: transfer for a cash consideration and transfer free of charge and in each type there will be two scenarios, whether the shares were owned by the seller for more that two years or less than two years.

1.Transfer for cash consideration

1.1. Shares owned by seller for more than two years

Neither seller nor buyers are taxed for this transaction if the sales prices corresponds to the market price of the shares.

1.2 Shares owned by seller for less than two years.

Seller is taxed for 20% income tax for the difference between the price for which the shares were purchased and the price for which they were sold (which should correspond to the market price)

2.Transfer free of charge

2.1 Shares owned by seller for more than two years

Seller is not taxed. Buyer is taxed with 20% income tax from the market value of the shares.

2.2 Shares owned by seller for less than two years

Both seller and buyer are taxed with 20% income tax. Seller is taxed based on the difference between the price for which the shares were purchased and the market price of the shares and the moment of transfer. Buyer is taxed based on the market value of the shares at the moment of transfer.

These were some basic situations regarding transfer of shares. If you may need any more detailed information based on your special case please contact us for a tax advice.

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