Digital Ministry proposing part of profit tax be returned to telecoms operators

MOSCOW. April 19 (Interfax) - Russia's Digital Ministry is proposing that that the investment tax deduction be extended to telecom operators, thus return to them a portion of profit tax paid, the ministry's press service said in a statement on Tuesday

The ministry is in favor of extending the deduction to telecoms operators to preserve investments in the operation and modernization of communication networks through regional support measures. Under current legislation, the ability to use the deduction should be set down in a regional law. Now 60 constituent entities of the Russian Federation have adopted laws providing for deductions, but provisions are not made in these laws for telecoms operator infrastructure.

"The Digital Ministry is proposing the addition of 61 OKVED "Activities in the field of telecommunications" in order to extend this support measure to telecoms as well. Russian regions should have a mechanism for attracting investments for the development of modern telecom infrastructure", the ministry said.

The Digital Ministry will send a letter with the relevant proposal to Russian constituent subjects.

The investment tax deduction provides for a reduction in the amount of profit tax on expenses related to the acquisition, manufacture, and modernization of fixed assets from January 1, 2018 (federal law N335-FZ dated 27.11.2017). The deduction can be used by entities paying profit tax up to and including December 31, 2027.