Gas extraction projects in the Arctic to receive tax preferences
© RIA Novosti. Aleksey Danichev

Gas extraction projects in the Arctic to receive tax preferences

Gas production companies will benefit from a zero tax rate for natural gas production on the Arctic shelf for 12 years, according to a bill on benefits in the Arctic zone of the Russian Federation, said Deputy Minister for the Development of the Russian Far East and the Arctic Alexander Krutikov at the 9th International Forum Arctic: Today and the Future.

"Arctic shelf industries will receive broad benefits. Taxes will be reduced considerably, primarily the mineral extraction tax, which will be only 5 percent for 15 years from the beginning date of extraction. Natural gas output for LNG production and for high conversion purposes and gas-to-chemicals production will receive a zero percent mineral extraction tax for 12 years," Krutikov said.

New extraction projects in the eastern part of the Arctic (the north of the Krasnoyarsk Territory, Yakutia and Chukotka) will also benefit from suspended tax for 12 years, then from the thirteenth to the seventeenth year the rate will go up gradually.

"Tax benefits are envisaged for the non-mining sector as well, for any small or medium business willing to invest at least 10 million rubles within 15 years. These projects will receive a zero federal income tax rate for ten years and reduced insurance rates as well," Krutikov said.

He added that the Arctic regions will also have a right to cut their regional tax rates.