Russia will present a package of tax breaks for Arctic before the year end

Release Date: 2011-11-11

Russia will before the end of the year present a comprehensive package of tax breaks and other benefits for the companies operating on the Arctic shelf.

According to the plan, which is expected to be approved by government before year’s end, the Arctic project operators will be offered a set of benefits which is to facilitate their investments in the complex region.

A copy of the plan has been obtained by newspaper RBK Daily.

Several ministries, as well as the companies Gazprom, Rosneft and Lukoil are reported to be involved in the process with the plan, the newspaper writes.

The list of measures not only includes the introduction of a zero-tax on oil, LNG and condensate export and on import of equipment and technology, but also significant other tax benefits. Among these will be an adjusted production tax, as well as tax on exploration. The companies will not have to pay property tax. In addition, a zero-VAT rule will be introduced both on export operations and on goods and services. Also the system of royalties is likely to be changed, and harmonized with international standards.

The new regulations come after the companies with shelf licenses have pushed hard for enhanced benefits. Current regulations applying to land operations will not make the far more complex and expensive shelf operations profitable, the companies argue.

Type:	NORMAL
Url:	http://www.oilandgaseurasia.com/news/