Pro-shipbuilding bill passes second reading in State Duma

A bill on measures to support domestic shipbuilding and shipping passed on Oct. 18, its second reading in the State Duma, the lower house committee said.

According to Yevgeny Fyodorov, heading the Committee on Economic Policy and Entrepreneurship of the State Duma, the bill is aimed at the creation in Russia of the legal framework encouraging shipowners to register their vessels under the Russian flag, to place newbuilds orders with Russian shipyards. The document makes amendments to the Code of Inland Water Transport (IWTC) and the Code of Merchant Shipping (CMS), tax and labor codes of Russia, as well as to four federal laws.  

 

The bill was prepared by the Ministry of Transport of the Russian Federation, Russian Ministry of Industry and Trade in conjunction with JSC United Shipbuilding Corporation (USC). The bill, in particular, provides for the reduction of operating costs of shipowners whose vessels will operate under the Russian flag, through tax breaks. In addition, the bill includes establishment of specialized shipbuilding areas with preferential tax treatment. Shipyards that fall under the new law, will receive exemptions on customs duties on imported foreign equipment, which has no analogues in Russia (duty is 10%), a zero rate of VAT on new vessels (18%) and a number of other benefits.

 

The benefits will attract those shipowners, whose vessels are registered in the Russian International Register of Ships (RIRS). The bill will be more beneficial for the shipowners whose vessels were built at Russian shipyards after January 1, 2010 and registered in RIRS, including sea-going, river ships and vessels of mixed ‘river-sea’ class. Coasters are tax-exempt.