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Russia proposes to extend tax deduction in the Arctic to mineral deposits

Russia proposes to extend tax deduction in the Arctic to mineral deposits

The Ministry of development of the East of the Russian Federation proposes to extend the tax deduction mechanism for projects in the Arctic to existing deposits of solid minerals (SM).

Earlier, Russian President Vladimir Putin approved a package of laws providing benefits for investors in the Arctic. Deputy Prime Minister-presidential envoy to the far Eastern Federal district Yuri Trutnev noted that the authorities plan to continue working to improve conditions for investors in the macroregion.

"Ministry of Russia, along with the Ministry of Finance, has prepared a bill providing for the extension of the tax deduction on existing deposits of solid minerals in the Arctic (with a degree of proficiency greater than 0.5), provided their expansion and modernization," the document says.

It's worth noting that the bill is planned for submission to the State Duma in the fall session. Now the tax deduction for SM projects in the Arctic is provided for when developing new fields.

Benefits for investors in the Arctic

According to the Ministry of Regional Development, thanks to the adoption of a package of laws on the system of preferences, the Russian Arctic becomes the largest economic zone in Russia and the world with an area of almost 5 million square kilometers with a competitive set of preferences. Residents are provided with a zero rate of income tax credited to the Federal budget for ten years after receiving the first profit (for all types of activities, except mining).

Reduced rates of income, property, and land taxes credited to the regional budget are also being introduced, as well as reduced rates of up to 1% under the simplified tax system (specific parameters of such benefits will be set by the Arctic regions after the package of Federal laws comes into force). It provides for reimbursement of part of the cost of paying insurance premiums to state extra-budgetary funds up to the final rate of 7.6% for all types of activities, except for mining.

Residents of the Arctic zone will be able to receive a tax deduction from the met in the number of investments made in the infrastructure necessary for the development of a new Deposit of solid minerals, as well as investments in new processing and processing facilities. The laws provide for a 0% VAT rate for icebreaking services, sea transportation, and transshipment of export-oriented cargo. Also, several administrative procedures will be simplified.

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