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On a tax conceded the word

How many really save the residents of the TOP on taxes, found out EastRussia

The fourth meeting of the government of the Khabarovsk Territory turned into a controversy about the financial benefits that the mode of advanced development areas (TOP) in the Far East gives investors. Officials responsible for attracting investments to the region believe that a business, by obtaining the status of a TOR resident and the benefits provided by the Tax Code, can save up to 70% of payments to budgets and up to 20% of the total cost of the project. However, based on the analysis of the business plans of TOP residents, FANO Vostokgosplan calculated that the tax benefit for projects varies within 7-12,5%, and stated that in order to radically reduce the cost of production in the Far East, it is necessary not only to provide point tax benefits.

On a tax conceded the word
Photo: Dmitry Shcherbakov
Special project TORA and Free Port
On Thursday, the government of the Khabarovsk Territory considered the issue of attracting investments to the region through various mechanisms, including the TOR mode, which provides investors with substantial benefits for a number of taxes and social contributions. The first deputy chairman of the regional government, Yuri Chaika, said that according to the forecast of the regional authorities, "investors as a whole save up to 70% on taxes and other payments thanks to these preferences." "If this is recalculated for investments for a long period, then approximately 20% can be saved. It depends, of course, on the industry, on the projects in which they are invested," said Mr. Chaika. 

The official confirmed the benefit of the TOR regime for investors with a slide that contained information on the amount of benefits received by residents of the TOP and the level of payments to the budget for the first half of the year 2017. 

According to the data, which Yury Chaika did not comment on in detail, the residents of the TOP have saved in the region on taxes and fees 121 million rubles. for half a year. Of these, 68,1 million rubles. was saved on contributions to social funds (56% of the amount of savings), 34,4 million rubles. on the profit tax (27%) and 18,5 million rubles. on the property tax (another 15%). At the same time, TOR residents paid 101,7 million rubles. taxes. Of these, 39,9 million rubles. made personal income tax (39% of payments), 32,1 million rubles. - contributions to social funds (32%), 17,23 million rubles. - income tax, 11,3 million rubles. - property tax., less than 1 million rubles. - transport and land taxes.

Thus, for the first half of the year in Khabarovsk Krai, residents of the TOP have saved 54% of the amount of payments to the budget, which looks even more impressive than the deductions made by Yuri Chaika's subordinates "about 20%" savings.

As you know, the preferential tax regime for investors - residents of the territories of advanced development - has been presented for the past three years as one of three "whales", which attract the attractiveness of this preferential treatment (the other two are administrative benefits and a simplified procedure for obtaining land for the project) . According to amendments to the Tax Code of the Russian Federation, adopted within the package of bills on TOR, the resident receives benefits on several key taxes. 

First, instead of 20% of the profit tax, the company pays 0% to the federal budget (the standard rate is 3%) and 5% to the regional budget (instead of 17%) in the first five years. In the next five years, the federal budget rate becomes standard, and in the regional budget it should be 10%. In this case, the resident should receive 90% of the profit from the type of activity for which his investment project was declared in the TOP, and, as the Ministry of Finance specified in January of 2017, the separate accounting of income and expenses. 

This privilege, however, is less significant for only start-up enterprises, perhaps even not earning a profit, than the reduced rate of payments to social funds: total payments are 7,6% instead of 30%, the rest is compensated by the federal budget. Thirdly, residents are exempted for the first five years from the property tax (it is levied by the regions). Other tax breaks, such as accelerated VAT refund and the mineral extraction tax rate, are too specific - they are not significant for all companies. 

The second co-rapporteur, scientific director of FANO Vostokgosplan (former Far Eastern Research Institute of the Market) Vadim Zausaev, entered into an absentee discussion with officials about the profitability of TOP regimes for investors right at the meeting. The special management regimes established by the government for the TOP and the Free Port of Vladivostok allow reducing the costs of business in the Far East, he agreed. But most of the projects announced by residents of the TOP are related to the manufacturing industry - the most costly. Mr. Zausaev stated that "the cost of the economy of the Far East remains the highest." "Unfortunately, this factor cannot be removed in any way - it can only be leveled by appropriate state support. Even in the socialist economy, the rise in prices in the Khabarovsk Territory was one and a half to two times - and this is at those tariffs. 

According to FAOO Vostokgosplan, which Vadim Zausaev cited on the slide, preferential treatment allows residents of the TOP to save from 6,8% of total investment costs in the Khabarovsk Territory to 12,6% on Sakhalin. The calculations were carried out, he explained, by Vostokgosplan specialists on the basis of business plans of investors provided by the Far East Development Corporation JSC (TOR managing company). "I've read here that the costs are reduced by 30%," Vadim Zausaev said, referring to the materials of the meeting. "The results turned out: the costs are reduced by a maximum of 8-10% .With the rise in cost (production costs in the Far East, EastRussia) in one and a half to two times. "This, unfortunately, is an objective reality." 

Calculations FANO "Vostokgosplan" according to the CRDV
Subject DFO
Savings on income taxes, million rubles.
Cost in TOR minus savings on income tax
Cost reduction due to savings on income tax,%
Cost reduction due to savings on social contributions and property tax,%
Total decrease,%
The Republic of Sakha (Yakutia)
Primorsky Krai
Khabarovsk Krai
Amur Region
Sakhalin Region 
Jewish Autonomous Region

Vostokgosplan proposes the Ministry of Oriental Development to take several measures at once to drastically reduce the cost of production in the Far East, Vadim Zausayev continued. "First of all, this is a cost-effective policy in the field of natural monopolies, state corporations. The second very important point is the expansion of the borders of the PDA, providing an opportunity for all active enterprises to participate," the economist said. On the slide, Mr. Zausev explained that this means "the extension of TOP regimes to existing production with the introduction of a" cut-off bar "of taxes at the level of 2-3 of recent years."

Among the strategic measures in the presentation were also named "the introduction of a cumulative system of tax incentives and preferences that stimulate the production of renewable natural resources and the development of deep redistribution", "the formation of vertical value chains in the center of which rental (high-yield) industries operate." Vadim Zausaev also suggested extending the Komsomolsk TOR to neighboring regions and paying so-called Far Eastern extra charges from the federal budget.
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