Russian PM Mishustin approves parameters of federal investment tax deduction at 3%

MOSCOW. Nov 29 (Interfax) - Russian Prime Minister Mikhail Mishustin has signed the instruction on the parameters of the federal investment tax deduction at 3%, and the deduction enters into force on January 1, 2025, the government's press service said.

"The federal investment tax deduction enters into force in Russia starting on January 1, 2025. Prime Minister Mikhail Mishustin has signed the decree setting the parameters. The deduction will be 3%. Profit tax payment may be reduced by this amount provided that the funds are then invested to develop production," the press service said.

The document indicates that the federal investment tax deduction is available to enterprises and organizations that extract minerals, as well as to companies that operate in the manufacturing sector, except for those that produce food products, beverages, and tobacco products. The investment tax deductions are also available to enterprises that supply consumers with electricity, gas and steam; provide catering and hospitality services; as well as organizations engaged in scientific research and development, and organizations and companies operating in the area of IT and telecommunications.

As reported, the Finance Ministry has envisaged 150 billion rubles in the 2025 federal budget in order to finance the federal investment tax deduction.

Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs (RSPP), said that companies had initially estimated the increase in the profit-tax deduction required to compensate for investing in assets at 500 billion rubles, then reduced the estimate to 300 billion rubles, then to 200 billion rubles, and then to the final version of 150 billion rubles. Shokhin said that this amount would be acceptable for the pilot year of 2025, though he has expressed hope that the amount would rise in subsequent years.