8 Nov 2017 11:58

Russian Duma passes law to introduce profit tax break for priority development areas

MOSCOW. Nov 8 (Interfax) - The State Duma passed a bill to significantly increase the duration of the concessionary period for payment of profit tax for residents of priority development areas (PDA) and the Free Port of Vladivostok in the third and final reading on Wednesday.

Under the passed bill, profit tax breaks would be differentiated by amount of investment.

Under current law, residents of PDA or the Free Port of Vladivostok pay zero profit tax to the federal budget and no more than 5% profit tax to the regional budget for five years after earning their first profit. If the residents do not earn a profit for three years, these rates went into effect in the fourth year.

Under the bill passed on Wednesday, these rates will go into effect for a sixth year if the investment agreement calls for the company to invest at least 500 million rubles in a project, and for a seventh year given an agreement for at least 1 billion rubles of investment.

If the investment agreement calls for investing at least 100 billion rubles, the concessionary period given the absence of profit can amount to 10 years from the date of the resident's inclusion in the registry of the PDA or Free Port of Vladivostok.