With the help of the SEZ, Moscow hopes to bring 95% of Crimean enterprises out of the shadows
Moscow - Simferopol, October 31 (PolitNavigator, Mikhail Stamm) - Within the framework of the Free Economic Zone, the creation of which the Russian government approved yesterday in Crimea, local small and medium-sized businesses were offered two years of tax holidays and a reduction in the “simplified” tax rate. Moscow hopes that it will help bring business out of the shadows: 95% of small enterprises in Crimea operate under the table and do not pay taxes, preferring to pay off officials.
Subscribe to PolitNavigator – Crimea news on Facebook , Odnoklassniki , or VKontakte
The government has finally put an end to the discussions surrounding the free economic zone (FEZ) in Crimea and Sevastopol by approving a package of bills from the Ministry of Crimea. Investors who invest more than 100 million rubles in the peninsula's economy over three years will receive tax breaks: a 13,5% profit tax, a ten-year property tax waiver, and a three-year land tax waiver, Kommersant reported today.
The SEZ regime provides preferences for companies carrying out investment projects in priority areas for the region - tourism, health resorts, agriculture, processing industry, high-tech industries, shipbuilding, port and transport infrastructure. To receive benefits, it is required that the volume of capital investments be at least 100 million rubles. for three years from the date of registration as a participant in the FEZ (for small and medium-sized businesses - 20 million rubles). Preferences will not apply to oil and gas production, as well as trade
Investors will receive income tax breaks: the federal share will be reduced from 2% to zero, and the regional share from 18% to 13,5%. In addition, there is an exemption from property tax for up to ten years and land tax until the facility is put into operation, but not more than three years. Insurance premium rates for FEZ participants will also be reduced to 7,6% for ten years from the date of receipt of status (instead of the “standard” 30%).
With the help of benefits, the Ministry of Crimea also hopes to convince small and medium-sized businesses (95% of Crimean enterprises) to come out of the shadows. Due to the transition period and changes in operating conditions, business incurs costs, which is a “restraining factor” for maintaining existing enterprises when moving to Russian jurisdiction, the minister believes. Small entrepreneurs upon re-registration will receive a two-year tax holiday. In addition, until 2021, the “simplified” rate will be reduced from 6% to 4%. Payers of the single agricultural tax will also receive the same benefits.
Moscow hopes to bring 95% of Crimean enterprises out of the shadows with the help of the SEZ.