Economic projects in the Arctic to receive stimulus for growth
The second tax code of the Russian Federation has recently undergone a series of amendments. Tax benefits will now be available under federal law for large-scale economic projects in the Arctic. The full document is available on the Russian government’s official legal information web portal.
According to the updated document, “organizations exploiting a subsoil site and which submitted a notice to that effect before 1 January 2020 will be exempt from paying tax outlined in article 333, paragraph 1, subparagraph 5 of this code...” The change applies to subsoil sites located “completely or partially further north than the 70th parallel north, and which fall completely within the borders of Krasnoyarsk Territory, the Sakha Republic (Yakutia), or the Chukotka Autonomous Area.”
The second Tax Code of the Russian Federation also specifies that “taxable income for new offshore raw hydrocarbon fields will be calculated according to its value... during the subsequent time periods.” For fields which are at least 50% located in the Kara Sea, the northern end of the Barents Sea, the East Arctic, White Sea, Pechora Sea, Sea of Okhotsk, and the southern end of the Barents Sea, this is 180 calendar days.
Tax exemptions will also apply to Arctic-based organizations specializing in the production of liquefied natural gas.
The next ‘Arctic: Territory of Dialogue’ International Arctic Forum is scheduled to take place in 2021. Discussions at the event will focus on several key areas affecting development in the region. These include the development of new technology, improving human capital in the Arctic, the economics of growth in the region, the rational use of resources, and sustainable development. For more information, please visit the official event website.