Cabinet approves bill on free economic zone in new regions
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The Government of the Russian Federation approved the draft law “On the Free Economic Zone in the Territories of the Donetsk People’s Republic, the Luhansk People’s Republic, the Zaporozhye Region and the Kherson Region”, it was decided to submit the document to the State Duma, according to site cabinet.
As explained in the government, the bill regulates the functioning of the free economic zone (FEZ) and the activities of its residents in the territories of the DPR, LPR, Zaporozhye and Kherson regions. The document establishes tax incentives for FEZ participants, including income taxes, property taxes, as well as land plots, the report says.
March 21 source RBC said that the Ministry of Construction and Housing and Communal Services of Russia developed a draft law on the creation of free economic zones in the territories of four regions. Then the interlocutor of the newspaper said that the zone will begin to operate on January 1, 2024 until the end of 2050.
On October 5, 2022, the Ministry of Economic Development of the Russian Federation announced the creation of a free economic zone in the annexed territories. Then the department said that these regions can be exempt from paying income tax to the federal budget for 10 years.
Since January 1, 2015, the SEZ has been operating on the territory of Crimea and Sevastopol. It implies preferential treatment in the field of land relations, construction, special conditions for entrepreneurs, benefits and preferences for investors, as well as the possibility of applying the free customs zone procedure. FEZ businessmen, in particular, do not pay property tax for the first 10 years, the first three years are exempt from land tax (if they own it) and deduct insurance premiums at a reduced rate (7.6% instead of 30%). The completion of the agreement is planned for 2039.
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