State Duma Committee considers tax incentives for investors in the Arctic
The Russian government has proposed changing the criteria for administering the mineral extraction tax (MET) in the Arctic. The bill has been approved at a meeting of the State Duma Committee on Natural Resources, Property and Land Relations.
In particular, the new legislation calls for amending the Tax Code to stimulate oil and gas exploration and prospecting in some areas of the Russian Arctic zone. It also proposes optimizing taxation for companies that are exploring new offshore fields in the northern part of the Sea of Okhotsk, the southern part of the Barents Sea, as well as in the Pechora Sea, White Sea and Sea of Japan.
At the same time, natural gas production at new fields will be exempt from mineral extraction tax until the accumulated production volume reaches 250 billion cubic meters unless the period of developing the area's reserves exceeds 12 years from the date commercial operations began. The new tax plan will apply to subsoil areas located in the Polar Regions within the boundaries of the Arkhangelsk Region, the Komi Republic, the Yamal-Nenets Autonomous Area, the Krasnoyarsk Territory, the Republic of Sakha (Yakutia) as well as the Chukotka Autonomous Area.