Ministry for Development of Russian Far East expects the introduction of preferences for investors

18.12.2019

Ministry for Development of Russian Far East expects the introduction of preferences for investors

A package of bills on preferences for investors in the Arctic zone of the Russian Federation is planned to be submitted to the State Duma in February 2020. This was announced on Tuesday by the deputy head of the Ministry for Development of Russian Far East Alexander Krutikov.

"Until February 6, we expect the package to be submitted to the State Duma. The package is subject to mandatory review in the legislative assemblies of the constituent entities of the Russian Federation. We ask the constituent entities of the Russian Federation to prepare draft reviews in advance, we ask them to do this by February 1, so that after they are submitted to the Duma, we can consider the bill before April next year. We expect the preference system to take effect next July", -Krutikov said.

In late October, Energy Minister Alexander Novak announced that ministries had prepared and agreed on incentive measures for implementing projects and developing deposits in the Arctic. The government discussed incentives for new fields, offshore production and LNG projects, as well as the expansion of value added tax on Arctic projects.

Benefits for the Arctic

According to the Kommersant newspaper, in mid-October, the Ministry for the Development of the Russian Far East introduced a package of draft laws on supporting investors in the Arctic zone. The main bill concerns the support of residents of the Arctic zone, in particular, it involves the introduction of a reduced tax on mining for Arctic projects.

Another document provides benefits only for the joint project of Rosneft and Neftegazholding by Eduard Khudainatov Vostok Oil for the development of Taimyr fields. We are talking about zeroing the mineral extraction tax rate for new Rosneft projects, the tax deduction on mineral extraction tax for the Vankorskoye field for the amount of investments and other exemptions.

The government offers alternative incentives for oil and gas projects in the Arctic. The corresponding initiative was discussed at a meeting of the Deputy Prime Minister of the Russian Federation Dmitry Kozak and the head of the Ministry for Development of Russian Far East Alexander Kozlov. It was a pilot oil tax for new projects and budget subsidies for old projects.

At present, Russia has a moratorium on the provision of new benefits to oil industry, which is calculated before the end of this year.


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