On improving legislation to promote the development of the resources sector
In accordance with the agenda for improving legislation that hinders the development of Russia’s resources and seeking to encourage the production of difficult to access oil, Federal Law No. 213-FZ amending Chapters 25 and 26 of the Tax Code and Article 31 of the Law on Customs Rates was adopted on July 23, 2013.
The State Duma has adopted, in the second reading, draft of Law No. 577558-5 that amends Parts 1 and 2 of the Tax Code and other legislative acts connected with tax incentives to encourage hydrocarbon production on Russia’s continental shelf. The draft law sets out a package of measures designed to encourage the development of offshore deposits.
In particular, it stipulates differentiated ad valorem mineral extraction tax rates for the regions based on the category of difficulty, cuts the export duty on shelf projects to zero, confirms the application of the approved 20% profit tax rate, guarantees a fiscal stability regime in accordance with the category of project difficulty, an accelerated depreciation and zero VAT on imported equipment, as well as cuts the property tax for such projects to zero.
The State Duma is expected to adopt the draft in the third reading in September 2013.
A draft federal law On Introducing Amendments to the Federal Law on Gas Exports has been developed by the Ministry of Energy to encourage the development of greenfield gas projects within internal seawaters, in a territorial sea and on the continental shelf, including the Black and Azov seas. This law authorizes Government-specified mineral users to export LNG if they produce gas in the above areas and/or hold licences that allow them to liquefy natural gas or build an LNG plant, as well as to companies in which the state holds at least 50% of shares and their subsidiaries which liquefy natural gas produced in the above areas.
This draft law will be considered by the State Duma during its autumn session.