21 Feb 2024 15:14

Federation Council passes law exempting certain Russian cos from elevated gas extraction tax

MOSCOW. Feb 21 (Interfax) - The Federation Council or upper house of Russia's parliament has approved amendments to the Tax Code that exempt a number of companies from the elevated mineral extraction tax on gas introduced on January 1, 2024.

The tax was increased to raise funds received from additional indexation of gas tariffs for the budget.

The MET for gas increased on January 1 by a coefficient based on a special formula reflecting the total volume of gas sold in the month preceding the tax period in a specific constituent member or region of the Russian Federation with the exception of certain categories of organizations and households. The amendments change how the coefficient is calculated: the new wording determines in more detail the organizations and situations in which the volume of gas sales is not taken into account when calculating MET.

The tax does not now reflect the volume of gas sold by associated gas processing organizations; the gas of thermal power plants; gas attributable to the Russian Federation under the agreement to develop the Piltun-Astokhskoye and Lunskoye fields under the Sakhalin-2 project as royalties for its sale to consumers; the gas of organizations engaged in LNG production, in terms of gas volumes purchased exclusively for its production; or gas used to generate heat electricity in terms of the volumes of gas required for production at regulated prices or tariffs.