Arctic Capital PDA placed under management of FEDC’s subsidiary
By the decision of Far East Development Corporation BoD, a subsidiary of the joint stock company, Managing Company “Arctic Capital”, LLC has been established in Murmansk. Co-founder is Murmansk Region Development Corporation, says press center of FEDC.
Priority Development Area “Arctic Capital” has been placed under management of FEDC’s subsidiary. Arctic Capital PDA was established by RF Government’s Decree No 656 dated 12 May 2020. The new company will contribute to prompt handling of residents’ and potential investors’ issues together with regional authorities.
On 13 July 2020, Russian President Vladimir Putin signed the package of federal laws on the system of privileges in the Arctic. The package of documents developed by the Ministry for the Development of the Russian Far East and Arctic includes the law on state support of entrepreneurial activity in the Russian Arctic and related amendments into Part 2 of the Tax Code and certain legislative acts of the Russian Federation. With the new package of laws adopted by the State Duma of the Russian Federation and the Federation Council, Russian Arctic becomes the country's and the world’s largest economic zone of almost 5 million square kilometers enjoying the unified privileges exceeding those of the European and Asian SEZs.
Upon approval of Yury Trutnev, Deputy Prime Minister of the Russian Federation, FEDC will supervise management of the new preferential regime in the Arctic zone. Potential residents of the Arctic Zone can apply from August 28 since the laws will enter into force 45 days after signing by the President and official publication. Commercial organizations or individual entrepreneurs with at least 1 million rubles of implemented and planned capital investments will be eligible to become Arctic residents.
The law resets to zero the part of the corporate profit tax payable to the federal budget, provided that the region will reduce the rate of the profit tax payable to the regional budget. The measure will be applicable for ten years from the first receipt of profit on the activity in the Arctic zone under an investment agreement. To be eligible for the tax relief, companies must also keep separate records of the revenues and expenses generated by the activity in the Arctic and by any other operations elsewhere.
A rebate on severance tax is introduced for 2021-2032 with regard to the production of specific types of mineral resources (oil shale, peat, saleable ore, non-metal commodities, diamonds and other things) in the new subsurface site in the Arctic zone. Coal and hydrocarbon production will not be eligible for the rebate. New subsurface sites include those where the depletion of reserves will be equal to or below 0.001 as of January 2021, or the sites that are not recorded in the national reserves register as of the same date. The tax rebate may not be over 50 percent of the tax paid in the respective taxable period.
The law also establishes zero VAT on the services provided by the ice-breaker fleet to vessels shipping goods for export and on the services of transporting goods by sea for their further shipment outside of Russia.
Related links:
Vladimir Putin signs the package of federal laws on the system of privileges in the Arctic >>>>
Arctic Capital PDA may include Liinakhamary port and Udarnik terminal >>>>
RF Government approves establishment of Arctic Capital PDA >>>>