Arctic to Become Special Economic Zone with Wide Range of Tax Breaks and Business Preferences
The Federal Law on State Support of Entrepreneurial Activity in the Russian Arctic Zone has been adopted by the State Duma and approved by the Federative Council of the Russian Federation. According to the document, the Russian Arctic becomes a special economic zone with a wide range of tax breaks and other business preferences. These measures are to stimulate well-paid job creation in the Arctic through increasing the number of new enterprises.
“Arctic zone possesses great economic potential, supported by natural riches and human resources. Creating appropriate conditions for its development is an important strategic task for the government,” noted Anton Kobyakov, Advisor to the President of the Russian Federation.
The law includes a number of preferences for Arctic zone residents, including tax breaks, partial compensation of insurance fees, as well as severance tax exemption equal to the amount of infrastructural investments.
“We believe the preference law in the Arctic has a great future. Apart from federal budget tax breaks, it includes various regional taxation discounts, such as profit, property, or land taxes up to their complete annulment. Evidently, Arctic territories will vary in terms of size and duration of the offered discounts, yet it matters most that they are available. Significant support is offered to the projects outside of mineral resource extraction: we are talking about decreasing insurance fees to 7.6%. This is just one example of preferences from a long list that no other country can boast. We are confident these breaks can inspire business development in the Arctic, most importantly job creation in the region,” said Alexander Kozlov, Minister for Development of the Russian Far East and the Arctic.
The Russian Arctic Zone that now is comprised of 4 territories of the Russian Federation, plus 45 municipal districts. Rules of the Free Customs Zone defined by the Customs Code of the Eurasian Economic Union and the Federal Law will be enacted in the Arctic.
Additional support measures are included for the indigenous small-numbered peoples of the area.