Taxation and Dividend Payment Procedure Applied

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New Taxation and Dividend
Payment Procedure Applied to
Shareholders
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LETTER OF
REPRESENTATION
IMPORTANT: This presentation (the “Presentation”) has been prepared by LUKOIL’s internal tax advisors to provide a
summary of certain Russian tax law considerations in connection with receiving payments of dividend on the LUKOIL
ADRs. This summary does not purport to be a legal opinion or to address all tax aspects that may be relevant to you. You are
urged to consult your own tax advisor as to your particular tax consequences, including the applicability and effect of any
other tax laws or tax treaties, of pending or proposed changes in the applicable tax laws as of the date hereof, and of any
actual changes in applicable tax laws after such date.
LUKOIL and its affiliates, officers, directors, employees and agents do not accept responsibility or liability for this
Presentation or its contents.
No representation or warranty is made as to the accuracy or completeness of the Presentation or its content. The
Presentation is not exhaustive and does not serve as legal, accounting or tax advice. Nothing herein shall be taken as
constituting the giving of investment advice and this Presentation is not intended to provide, and must not be taken as, the
basis of any decision and should not be considered as a recommendation by LUKOIL and its affiliates, officers, directors,
employees and agents.
The recipient must make its own independent assessment and such investigations as it deems necessary. Nothing in this
Presentation is intended to create or shall be construed as creating any fiduciary relationship between LUKOIL and the
recipient.
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PROVISIONAL DIVIDEND PAYMENT PLAN
FOR SHAREHOLDERS STARTING JANUARY 01, 2014
OAO LUKOIL
tax agent - OAO LUKOIL
DIVIDENDS
Shareholders in OAO
LUKOIL Register
t
a
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e
s
1. Dividend payment to the shareholders
registered in OAO LUKOIL Register by OAO
LUKOIL - 25 business days following the List
Compilation Date* at the latest (i.e., August 19,
2014, inclusive).
Tax agent of NPO ZAO NSD
t
a
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e
s
DIVIDENDS
DIVIDENDS
1. Dividend payment to NPO (NSD)
by OAO LUKOIL to ensure cascading
payments - 10 business days
following the List Compilation
Date at the latest (i.e., July 29,
2014, inclusive).
Central Depositary
(NPO ZAO NSD)
DIVIDENDS
2. Dividend payment to
shareholders by NPO
ZAO NSD - 5 business
days
following
the
dividend reception date
at the latest (i.e.,
August,
26,
2014,
inclusive)
Custodians
Nominee shareholders,
beneficial owners
tax agent - Custodian
Shareholders
with depositary
accounts in
NPO ZAO NSD
RF TAX AUTHORITIES
T
a
x
e
s
DIVIDENDS
2.Dividend payments made by
NPO ZAO
NSD to custodians - the
business day following the
dividend reception date at the
latest (i.e., July, 30, 2014,
inclusive)
3. Dividend payment to
shareholders by custodians 5 business days following the
dividend reception date from
NPO ZAO NSD or other
custodians at the latest (the
concrete dividend payment
date depends on the number
of
the
custodians
successively involved into the
settlement procedure)
Shareholders
with depositary
accounts in
Custodians
* from now on the concrete transaction dates are determined in view of the assumption that the Annual General Meeting of OAO LUKOIL Shareholders will regard
July, 15, 2015, as the compilation date of the List of persons entitled to dividends (hereinafter – the List).
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SHAREHOLDER INFORMATION
REQUIRED FOR DIVIDEND PAYMENT
•
OAO LUKOIL pays dividends and withholds income taxes based on shareholder
information and the details contained in the profile of the registered person
submitted by the shareholder to OAO Registrator NIKoil maintaining the
Shareholder Register of OAO LUKOIL.
•
Should you have any questions as to filling in the profile and the details
contained, do not hesitate to contact OAO Registrator NIKoil at the following
address:
8, Ivan Franko st., Moscow, 121108, tel.: 8 800 200-81-60 (free call across Russia),
8 (495) 926-81-73.
•
ОАО Registrator NIKoil places the information at the web-sites:
http://www.rcnikoil.ru,
http://www.computershare.com
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INCOME TAX RATES
GIVEN THAT DIVIDENDS ARE PAID AFTER JANUARY
01, 2014
Should dividends be paid to OAO LUKOIL and custodians the following income tax
rates (PIT and NSPS) shall be applied:
9% RATE
(in view of the possibility of the tax base reduction based on Art. 275 of the RF Tax
Code)
Applied to the dividends payable to the RF tax residents*
15% RATE
Applied to the dividends payable to non-RF residents**
Rates under international agreements***
Applied to the dividends payable to non-RF residents* - tax residents of the states that have international
agreements with the RF
In order to entitle the dividend recipient to application of tax rates based on international
agreements one shall submit the supporting documents to the tax agent within the respective time
lines.
The shareholders registered in OAO LUKOIL Register shall submit the supporting documents to
OAO Registrator NIKoil until July 18, 2014, inclusive.
*RF tax resident – an individual actually residing in Russia at least 183 calendar days or longer per year or a legal entity established under the
Russian law.
** non-RF resident – an individual actually residing in Russia less than 183 calendar days per year or a legal entity established under foreign
laws and located outside of Russia.
*** as exemplified by the agreement with the Republic of Cyprus: 10% rate (the only proviso – residency in the Republic of Cyprus), 5%
rate (requires additional proviso - share in the issuing company).
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The requirements for the documents granting rights to tax rate
application based on international agreements
1. The tax residency of the state that entered into the international agreement with the RF is
confirmed by the certificate of residency of the legal entity/individual (the requirements to the
certificate are specified in Letter No. OA-4-13/232 by RF FTS as of January 14, 2014).
The certificate compiled in a foreign language shall be accompanied by a Russian translation.
Attention! Passports of foreign citizens, certificates of registration issued by foreign countries
(certificates of incorporation), abstracts from trade registers, etc. shall not be regarded as the
documents confirming the residency of person for taxation purposes.
2. In order to confirm OAO LUKOIL share or participation interest for tax exemption purpose
under international agreements (in case of the above provisos) one shall submit additional documents in
compliance with the requirements of tax agents.
In order to confirm OAO LUKOIL share or participation interest the shareholders registered in OAO
LUKOIL Register shall submit the following documents to OAO Registrator NIKoil until July 18, 2014,
inclusive:
•authenticated copies of share purchase agreements, bank statements, transfer orders, settlement
confirmations by the depositary clearing company;
•letter of guarantee containing the obligation to confirm the participation interest of the dividend
recipient in OAO LUKOIL as of the dividend payment date in the amount provided for by the
international agreement
•proof that the shareholder is an actual income recipient – beneficial owner (Letter No. 03-00-РЗ/16236
by the Ministry of Finance as of April 09, 2014).
Documents compiled in a foreign language shall be accompanied by a Russian translation.
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THANK YOU FOR YOUR TIME!

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