Moscow - The Russian Federation Council has passed several bills to create a free economic zone (FEZ) in Crimea and Sevastopol, as well as tax and insurance tariffs for FEZ participants.
The first bill, which was introduced by the Russian government, envisions a special legal regime in Crimea and Sevastopol in order to attract and carry out investments. The bill also calls for the use of a customs procedure for the FEZ, as well as the creation of free ports. The FEZ regime is expected to last for 25 years with a possible extension.
The special zone will include particular taxation conditions and subsidies to recover FEZ participants’ costs spent on customs duties, taxes and fees on goods imported to carry out investment projects.
A second bill, which was also approved, calls for insurance fees to be lowered for FEZ members to 7.6 percent from the existing 30 percent. Of this, 6 percent will go to the Pension Fund, 1.5 percent to the Social Insurance Fund and 0.1 percent to the Federal Compulsory Medical Insurance Fund. This tariff will be in effect for participants registered in the first three years of the FEZ’s existence. The tariff will last for 10 years from the date the entity receives the status of official FEZ participant.
The senators also approved the law On Amendments to the Tax Code, which sets a special method of taxing FEZ participants.
The document also sets a lowered corporate income tax. The tax rate concerning tax for the federal budget (2 percent) is being set at 0 percent for 10 years.
Legislation of the Republic of Crimea and Sevastopol might set a lower tax rate for profit transferred to the budgets of the Russian federal subjects, which is 18 percent, at no more than 13.5 percent.
The law On Development of the Crimean Federal District and the Free Economic Zone on the Territory of the Republic of Crimea and Sevastopol City of Federal Significance and other corresponding laws enter into force on Jan. 1, 2015.
