At present, there are several types of incentives in Russia:
The incentives are briefly described below.
Also note that Russian tax law provides for special tax regimes to support small and medium-sized enterprises (SMEs). These include unified and simplified tax regimes, as well as a unified agricultural tax.
Many industrial regions of Russia offer numerous tax and non-tax incentives and benefits to investors.
Regional incentives in the form of reduced tax rates (primarily the given region’s portion of CIT, property tax, and transport tax) are granted to certain classes of taxpayers, typically large investors or entities operating in specific industries. The reduced regional rates introduced before 1 January 2018 will apply until the date of their expiry but not later than 1 January 2023. Local land tax incentives are frequently available for such investors as well. The size of an entry investment is usually in the range of around RUB 50 million to RUB 150 million. Some regions require a lesser amount, and some do not require any minimal amount at all (it is subject to negotiation).
There are also several notable non-tax incentives, including the allocation of budget subsidies, partial compensation of capital expenditures, provision of guarantees to banks, simplified access to infrastructure facilities, lower rental charges, and administrative and legal support, among others.
The following types of SEZs have been established in Russia:
The minimum amount of investment to be eligible for such incentives are:
In addition, reduced social contribution rates are available for residents of industrial zones if they are engaged in R&D.
Residents of SEZs may also enjoy free customs zones.
ADZs have been initially established to develop the Russian Far East. Currently, ADZs are expanded to some other Russian regions such as ADZs in Republic Komi, Smolensk region, etc. ADZs offer special terms for companies operating in various industries (e.g. agriculture, textiles, chemicals, pharmaceuticals, furniture, telecommunications, education, science and technology, etc.), including CIT and property tax incentives, free customs zones, project financing, and simplified rules for hiring foreign employees. In particular, residents of ADZs are provided with the following tax incentives:
Residents of the port enjoy the following tax incentives:
The following 'activities' incentives are available to taxpayers in Russia:
Participants in the Skolkovo Innovation Centre enjoy a number of benefits, the main ones of which are: exemption from CIT and property tax, as well as from VAT liability, and reduced rates for mandatory social fund contributions.
There are two types of contracts that may be concluded directly with the Russian Federation: a special investment contract and a regional investment project. Investors who have concluded such contracts may enjoy a reduced CIT rate and a number of non-tax incentives, including privileges regarding rental payment for land plots, 'grandfather' clauses, etc.
Credit relief is available for foreign taxes paid up to the amount of the Russian tax liability that would have been due on the same amount under Russian rules.