Changes to the Regional Law “On Corporate Profit Tax Rate for Certain Categories of Taxpayers in the Sverdlovsk Region” were adopted today.
Thus, in order to create competitive advantages aimed at attraction of residents to Titanium Valley, it was decided to zero the rate of corporate profit tax payable to the regional budget for the special economic zone residents for a term of ten tax periods. This benefit will be applicable from the first profit receiving time, and not from the time of the SEZ resident registration.
According to explanation of Anatoly Ogloblin, Sverdlovsk Region’s First Deputy Minister of Economy, given at the regional government meeting, later on, from the eleventh to the fifteenth tax period, the profit tax rate will constitute five percent, and from the sixteenth period it will be 13.5 percent. These measures are conditioned by a long (six or seven years) investment phase period during fulfillment of large-scale projects by the special economic zone residents. Experience of other regions in attraction of SEZ residents was taken into account in development of these initiatives. Therefore, the Titanium Valley residents will have additional advantages, which will increase Sverdlovsk Region’s investment appeal. As Deputy Chairman of the Sverdlovsk Region Government Alexey Orlov pointed out, “we are confident that, as a result, the regional budget will not lose anything, as in the course of the new production facilities development in the Sverdlovsk Region the regional treasury will see an increase of proceeds coming from the personal income tax payments. In addition to that, the production facilities to be located in Titanium Valley will be quite significant, and will not be dismantled or relocated”.
It is to be recalled that pursuant to the current legislation the Titanium Valley residents in the Sverdlovsk Region are granted such tax preferences for a period of ten years as exemption from corporate profit tax, transport and land tax, as well as reduced profit tax rate. Today’s decision of the Regional Government reduces this rate to zero percent.