The Kuriles were sent to Kolyma – Newspaper Kommersant No. 36 (7481) dated 03/02/2023

The State Duma adopted amendments yesterday extending the regime of the special economic zone (SEZ) of the Magadan region to the territory of the Kuril Islands. Such a belated accession is explained by the restrictions in force in the EAEU on the number of territorial zones in the country. The changes will allow companies operating in the Kuril Islands, which have previously received the right to significant tax benefits from the authorities, to also take advantage of the free customs zone regime.

The central authorities are completing the formation of a preferential regime for business on the territory of the Kuril Islands. Yesterday the State Duma approved a draft law on simplification of the regime of the free customs zone, to which, as amendments for the second reading, norms were introduced on the extension of the regime of the Magadan SEZ to the Kuriles. According to the amendments, such a regime will operate on the islands until 2047. The Ministry of Finance explained the “joining” of the Kuriles with the Kolyma SEZ by the requirements of the Eurasian Economic Union, according to which there can be no more than three territorial SEZs created by separate laws in the country – and they already operate in the Crimea, Magadan and Kaliningrad.

The expansion of the SEZ regime to the islands is necessary for the use by companies that are already entitled to enjoy tax benefits in the Kuriles, also preferences in the customs clearance of goods and the free customs zone regime. The latter implies the possibility of importing goods without paying duties and taxes and without applying non-tariff regulation measures. In particular, as Nikita Zolkin, head of the customs policy department of the Ministry of Finance, explained in the State Duma, “a SEZ participant in the Kuriles will be able to open any production anywhere and import goods that will have foreign status in the territory of this zone, and their customs clearance will be required only at checkpoints in the event of their export to the rest of the territory of Russia. Taking into account the exemptions envisaged by the project regarding the application of the free zone procedure for the import of goods during construction, the use of this regime will be relevant primarily for construction projects on the islands, including, for example, the creation of a recreational cluster.

The introduction of a special regime in the Kuril Islands, which implies tax, customs and administrative breaks, which can be used not only by Russian, but also by foreign investors, including Japanese, was announced by Vladimir Putin at the Eastern Economic Forum in 2021. However, Tokyo, which, as is known, considers the four islands of the Kuril chain to be disputed territories, as previously reported, did not support the idea of ​​creating a SEZ regime on them. The Russian authorities explained the need to introduce a preferential regime by the remoteness of the islands from the mainland, the underdevelopment of their infrastructure and difficult climatic conditions – all these factors require large investments to start a business. Taking into account the specifics of the islands, interest in benefits was shown primarily by fishing companies and enterprises in the tourism industry.

At the end of 2021, the government submitted to the State Duma a draft amendment to the Tax Code, providing for organizations registered on the islands from 2022 to be exempt from taxes on income, property, land and transport, as well as the use of reduced insurance premiums (was adopted in March 2022) . These benefits are provided if companies do not have separate divisions outside the Kuriles, they are not engaged in intermediary activities (except for trading their goods), the production of excisable goods, the extraction and processing of hydrocarbons, and the share of passive income (dividends, rental income) does not exceed 10% from all receipts. That project provided for the extension of the free customs zone regime to the Kuriles. But during the consideration, the deputies excluded these provisions, since they are the subject of not tax, but customs regulation, and proposed to transfer them as amendments to the second reading to another bill – on simplifying the application of the free customs zone regime, which was approved yesterday in the second reading. .

Evgenia Kryuchkova, Tatyana Edovina