Lawmakers endorse a bill encouraging Russian shipbuilding and shipping industry
The Russian State Duma on October 21, 2011 approved on the third reading a bill on measures to support domestic shipbuilding and shipping, the parliament lower house press office said.
The bill that was given final approval is believed to foster Russian shipping companies to register their fleet under the Russian flag, upgrade their fleet placing newbuilds orders at domestic shipyards.
The draft law approval entails some amendments to the Inland Water Transport Code of the Russian Federation (IWTC), the Merchant Shipping Code, Tax and Labor Codes of Russia, and to four federal laws.
The bill provides benefits for those shipowners, whose vessels are registered in the Russian International Register of Ships (RIRS). The owners of vessels that were built at Russian shipyards after January 1, 2010 and registered in RIRS, namely sea-going ships, river boats and mixed’ rive-sea’ class vessels will enjoy more benefits. The ships that would operate on short sea trade are subject to income tax exempt.
The bill introduces restrictions on the initial registration of ships in the RIRS for vessels over 15 years, currently registered in foreign ship registers and for ships over 15 years, operating as coastal vessels only.
On the second reading the lawmakers secured in the bill a clause on zero rate (up to 15 years) of insurance contributions made by the shipowner for crew members with further compensation for the contributions from the state budget of the Russian Federation (through Pension Fund, Social Insurance Fund, Federal Compulsory Medical Insurance Fund).
Besides, the bill provides an opportunity for shipowner and crew members to conclude on mutual agreement fixed term employment contracts, as well as indefinite-term and cruise contracts.
A few benefits will be granted to the dockyards and shipbuilders that will get the status of the residents of special industrial and production economic zones. Before its second reading the bill had more clearly defined the benefits, namely the exemption for a 10-year period from land tax and property tax (vs current 5-year term), granted to domestic shipbuilding companies.
According to drafters, the enactment of the bill may reduce the payback period of a new vessel from the current 20 to 12 years. This will encourage the Russian shipowners to invest in fleet upgrade and book newbuilds orders with domestic shipyards.
The draft law prepared by the Ministry of Transport, the Ministry of Industry and Trade in conjunction with United Shipbuilding Corporation and representatives of major Russian shipping companies was introduced by the Russian Government before the State Duma on May 30, 2011. The bill was considered and given approval by the State Duma on its first and second reading on Jul 1, and Oct. 18, respectively.
The bill that was given final approval is believed to foster Russian shipping companies to register their fleet under the Russian flag, upgrade their fleet placing newbuilds orders at domestic shipyards.
The draft law approval entails some amendments to the Inland Water Transport Code of the Russian Federation (IWTC), the Merchant Shipping Code, Tax and Labor Codes of Russia, and to four federal laws.
The bill provides benefits for those shipowners, whose vessels are registered in the Russian International Register of Ships (RIRS). The owners of vessels that were built at Russian shipyards after January 1, 2010 and registered in RIRS, namely sea-going ships, river boats and mixed’ rive-sea’ class vessels will enjoy more benefits. The ships that would operate on short sea trade are subject to income tax exempt.
The bill introduces restrictions on the initial registration of ships in the RIRS for vessels over 15 years, currently registered in foreign ship registers and for ships over 15 years, operating as coastal vessels only.
On the second reading the lawmakers secured in the bill a clause on zero rate (up to 15 years) of insurance contributions made by the shipowner for crew members with further compensation for the contributions from the state budget of the Russian Federation (through Pension Fund, Social Insurance Fund, Federal Compulsory Medical Insurance Fund).
Besides, the bill provides an opportunity for shipowner and crew members to conclude on mutual agreement fixed term employment contracts, as well as indefinite-term and cruise contracts.
A few benefits will be granted to the dockyards and shipbuilders that will get the status of the residents of special industrial and production economic zones. Before its second reading the bill had more clearly defined the benefits, namely the exemption for a 10-year period from land tax and property tax (vs current 5-year term), granted to domestic shipbuilding companies.
According to drafters, the enactment of the bill may reduce the payback period of a new vessel from the current 20 to 12 years. This will encourage the Russian shipowners to invest in fleet upgrade and book newbuilds orders with domestic shipyards.
The draft law prepared by the Ministry of Transport, the Ministry of Industry and Trade in conjunction with United Shipbuilding Corporation and representatives of major Russian shipping companies was introduced by the Russian Government before the State Duma on May 30, 2011. The bill was considered and given approval by the State Duma on its first and second reading on Jul 1, and Oct. 18, respectively.