Krutikov on the tax and investment climate in the Arctic
The fifth international conference, The Arctic: Shelf Projects and Sustainable Development of the Regions (Arctic 2020) opened in Moscow on February 19. In his opening remarks at the plenary session, Deputy Minister for the Development of the Russian Far East and Arctic Alexander Krutikov said that a package of documents on tax benefits for companies working in the Arctic had been submitted to the State Duma.
"We have considered the possibility of such measures before, but now we can discuss practical instruments and mechanisms," the deputy minister noted. He added that the list of Arctic benefits is even longer than that approved for companies in the Russian Far East, and that the first reading of the bill would begin soon. "We expect the bill to be approved this spring and come into effect in 2021," he said.
Alexander Krutikov pointed out that the ministry had reached an agreement of principle with the Finance Ministry to introduce benefits for small Arctic businesses when it comes to insurance premium set-off. "We do not need any new laws to introduce these measures, and we therefore expect that they will be applied as soon as next year," he said.
In addition, the proposed non-tax benefits include the possibility of a tax free zone similar to the priority development areas and the Free Port of Vladivostok in the Far East. Other measures stipulate a simplified procedure for the allocation of land to investors, as well as shorter and fewer inspections of business facilities. There will also be infrastructure support programs. To be eligible for a 20 percent tax subsidy, a project must attract at least 300 million rubles of private investments.
The deputy minister added that he hoped the regions would contribute to the tax benefit program for companies operating in the Arctic.