Tax benefits in Crimea and Sevastopol - special economic zone

For entrepreneurs who want to “put down roots” in Crimea or Sevastopol (a new subject of the federation), the next 25 years promise to be a real tax haven. The favorable tax situation will affect many areas of business, so today entrepreneurs are preparing the necessary documents to obtain the status of a participant in the state support program for Crimea.

The entire Crimean peninsula is officially recognized as a Special Economic Zone (SEZ) until 2040, and this step can safely be considered a favorable factor for the development of business in Crimea and attracting new investments into the economy of the republic.

• Conditions for participation in the SEZ of Crimea and Sevastopol
• Reduced tax rates and other benefits for business in Crimea
• Features of taxation in Crimea and Sevastopol
• Freedom of customs space and port zones of Crimea
• Land use and construction on the territory of the Crimean SEZ
• Economic interaction with mainland Russia
• Termination of the contract of a FEZ participant voluntarily and forcibly
• Legislative framework for the Special Economic Zone in Crimea
• SEZ management bodies

The current conditions of the FEZ in Crimea are the most attractive for investors, due to a number of reasons. For example, the preferences and benefits associated with various areas of business are quite serious, including:

• 2% maximum tax rate on profits in the first 3 years of activity;
• Providing the opportunity to pay insurance premiums from salary in the amount of 7.6% during the first 10 years;
• The opportunity to have a “0” corporate property tax rate for 10 years;
• The tax rate under the National Tax Service was zero until 2016, and during the next five-year period it was 4%.

These, like many other pleasant tax surprises, are designed to stimulate and develop the economic activities of entrepreneurs on the Crimean peninsula. As stated by the current Deputy Minister for Crimean Affairs A. Sokolov, the Russian government is striving to create new incentives and opportunities for local businesses, to help them adapt to Russian laws and modern conditions.

In addition, loyalty is also due to the fact that the political and economic risks that have arisen and sanctions sentiments, which are directly related to activities on the peninsula, require certain compensation. And these types of benefits can push the development of business in Crimea and make the conditions as profitable and attractive as possible for both local entrepreneurs and foreign sponsors.

So far, in practice, the conditions for working in a free economic zone on the new Russian territory have not yet been fully worked out, so it is quite difficult to talk about the pros and cons. It is clear that in the course of setting up the new system, it will be necessary to adopt additional laws, amendments, or make some changes to existing laws - depending on the first experience gained and related nuances. But today we can call the conditions for entering the zone of economic freedom quite simple.

Conditions for participation in the SEZ of Crimea and Sevastopol

The operation of the SEZ on the peninsula is regulated by Federal Law dated November 29, 2014 under N 377-FZ. The current legislation does not yet provide for restrictions on the organizational and legal form of individual entrepreneurs or legal entities wishing to become participants in the SEZ.

Entrepreneurial activity in the SEZ is limited; it cannot concern the use of subsoil for the purposes of exploration and extraction of minerals, development of deposits on the continental shelf of the Russian Federation.

This means that any legal entity. persons and individual entrepreneurs registered and registered in Crimea with tax authorities have the right to receive the status of a SEZ participant. It is mandatory to have a corresponding investment declaration on the implementation of an investment project in the territory of the Republic of Crimea. As Andrey Sokolov, Deputy Minister for Crimean Affairs, said in an interview with CrimeaBusinessConsulting, in order to fully enter the profitable economic zone, it is necessary to have a registration of an individual entrepreneur/legal entity in Sevastopol or Crimea, as well as an investment project with a capital investment of at least 3 million rubles for the first 3 years of activity. Without the status of an independent legal entity, various representative offices and branches of companies will not be able to enter the zone.

For smooth entry into the free economic zone, a number of conditions and formalities must be observed. Mandatory are:

1. Registration of an individual entrepreneur or organization in Sevastopol or the rest of Crimea.
2. Registration with local tax authorities.
3. Submitting a corresponding application with a request to conclude an agreement with the possibility of operating in a FEZ. This application is submitted in writing to the Council of Ministers of Crimea or the Legislative Assembly of the city of Sevastopol.
4. Attachment of the specified documentation package when submitting an application. Such documents are: - for legal entities. persons - photocopies of constituent documents, - copies of documents on tax registration, - photocopies of state registration certificates. registration of individual entrepreneur or legal entity. person - an investment declaration set out in the appropriate form.
5. Filling out the established sample investment declaration. The content of the declaration is determined by the standards of Federal Law Federal Law No. 377, reflecting the following information: - type of activity, - purposefulness of the investment project, - economic and technical definition of the investment project (the size of the average salary and the number of planned job vacancies must be indicated), - the amount of total capital financial investments, planned within the framework of the project (in particular, information is required on planned investments in the first 3 years, counting from the date of conclusion of the contract), - a reflection of the implementation of the investment project in Crimea or Sevastopol, - a reflection of the schedule of annual investments in the first 3 years of activity.
6. The next point is waiting for the relevant authorities to make a decision and the final conclusion. The procedure and timing of consideration depend on the size of capital investments. If the investment amount is more than 100 million rubles, the application with the draft agreement and attached documentation is sent for consideration to the expert council on SEZ issues no later than 7 days. The council reviews the application within 15 days, and the body may require the applicant to make any changes to the submitted declaration. If the declared amount is less than 100 million rubles, the application is required to be considered by the highest executive authorities of Sevastopol or the Republic of Crimea, depending on the place of registration of the applicant. Review takes place within a 7-day period.
7. Conclusion of an agreement on work in a free economic zone. The concluded agreement is then included in the register of participants in the free economic zone.
8. The last organizational issue is obtaining a certificate of inclusion of the participant in the unified register of SEZs. It is from this time that the applicant becomes a full participant and receives the right to carry out business and other types of activities in the territory of the free economic zone under special tax regimes. Opportunities and conditions are governed by the framework of the concluded agreement.

Refusal to conclude an agreement is practically impossible if the participant has fulfilled all the specified requirements and provided all the necessary information and documents. This point is also regulated by current legislation.

Justification of the effectiveness of business taxation regimes in Crimea

It is not possible to say definitively which mode is most effective. There is no universal way to calculate this, which is due to several factors:

1. Incomparability of tax calculation bases. For example, the amount of UTII will not depend on financial performance.
2. The need for assumptions about the cost structure. The benefits of various modes will be directly determined by the profitability of the activity. If we conditionally divide the types of activities, classifying production, trade, and agriculture into one category, and the provision of services and rent into the second, then when analyzing the simplified tax system, the second option, taking into account higher profits, will be shown separately.
3. The amount of social contributions from wages plays an important role, determining the final amount of the tax, and, accordingly, influencing the overall tax burden. The general rate of social contributions for calculations is considered to be 30%.

Due to the unavailability of a patent and the unfavorable conditions of the OSNO special regime, small businesses will need to choose between UTII and the simplified tax system. If the company has an excess amount of revenue, no choice is made - the entrepreneur works on UTII terms by default. At the same time, the activity of an enterprise on UTII is impossible with a greater tax burden than would be the case under OSNO conditions. As a result, small businesses whose turnover does not exceed 64.02 million rubles (2014 prices) can choose between UTII and simplified taxation system - this depends on the efficiency of their activities. But companies whose turnover is more than 64.02 million rubles are required to exercise strict control so that their tax obligations under UTII are no higher than under OSNO.

Reduced tax rates and other benefits for business in Crimea

According to Russian legislation, in this situation there are 2 types of tax benefits. The former include benefits determined for zone participants, and the latter are general benefits that apply to all individual entrepreneurs and organizations operating in the zone.

Benefits for residents of FEZ in Crimea and Sevastopol include:

• Reduced corporate income tax rates and the possibility of using increased depreciation rates for fixed assets;
• When working on VAT - tax benefits when placing products under the customs procedure of a free zone of customs control;
• Possibility of zero taxation on the property of organizations for 10 years;
• Total insurance premiums for the 10-year period have been reduced to 7.6%;
• Land tax is not paid in the first 3-year period of operation.

The SEZ Law may establish a certain list of requirements regarding the reimbursement and payment of VAT, as well as the application of tax deductions for excise duties. In addition, there are certain issues when registering FEZ participants as payers of special taxes.

Payment deadline

The tax period for collecting revenue is a calendar year, and the reporting period is a quarter. The amount of funds for the quarter is calculated on an accrual basis, and is paid within the period established by law. Reporting period for payment of advance payments:

• 1st quarter - before the 28th day of the 4th month after the end of the quarter;
• 2nd quarter - before the 28th day of the 7th month after the end of the second quarter;
• 3rd quarter - until the 28th day of the 10th month after the end of the third quarter.

The main amount - income tax payable - until March 28 of the year following the reporting year.

If the profit is received from state or municipal securities, then a different period applies - during the first 10 days of the month following the month in which the funds were received.

Features of taxation in Crimea and Sevastopol

Income tax in the Crimean economic zone is the most pleasant and profitable, because FEZ participants pay corporate income taxes at reduced rates. This is the case when it comes to taxes to the regional budget. And residents are completely exempt from paying taxes to the federal budget - for 10 years from the date of receipt of the first profit. Tax rates are determined by the highest executive bodies of Crimea and Sevastopol, but their amounts will not exceed the established maximum. For example, for the first 3 years a participant pays 2% income tax to the local budget, from 4 to 8 years of activity - 6%, starting from the 9th year of operation - 13.5%.

No less comfortable is the fact that participants in the free economic zone are also exempt from taxation in relation to property on the balance sheet of organizations. The important point is that tax-free property must be acquired or created for the purpose of carrying out certain activities in the territory of the FEZ. The property must also be located within the zone. Participants are exempt for 10 years, the countdown of which begins from the next month after the property is registered.

This type of property includes not only the property of organizations, but also property transferred by local governments to the balance sheet of the enterprise. It is believed that the most relevant benefits in this area will be for the housing and communal services sector and those organizations that manage a large number of property holdings.

A similar option is a discount on land taxes. The criteria for providing benefits are practically the same - the location of the land plot on the territory of the SEZ, as well as its operation in order to implement the terms of the agreement in the territory of the zone. The validity period of these benefits is 3 years from the month the FEZ participant entered into ownership of a specific plot if all necessary conditions are met.

Premiums are paid at 7.6% over a 10-year period. This benefit applies to residents who received the status of a FEZ participant no later than a 3-year period from the date of formation of the free economic zone on the Crimean peninsula.

Compliance with all rules, conditions, benefits will be fully monitored. But although all tax audits will be carried out by the Federal Tax Service, any unscheduled audits must be strictly coordinated with the Ministry of Crimea and individual economic bodies of the constituent entities.

Income tax rate in Crimea

The establishment of tariffs is regulated by the legislation of the Russian Federation, according to which a certain region has the right to establish individual rates for certain types of organizations. But the standard income tax rate in Crimea is 20%. Until 2024, 3% will go to the federal budget, the remaining 17% to the regional budget. Considering that the republic belongs to a free economic zone, the Crimean government has developed individual collection tariffs for certain categories of payers.

Table of tax rates in 2022 in the Republic of Crimea.

Freedom of customs space and port zones of Crimea

Along with the development and creation of a free economic zone, its analogue in customs terms is being created - a Free Customs Zone. Within the jurisdiction of the Free Economic Zone, any goods will be able to be used and placed on the territory of the Free Economic Zone without paying taxes and customs duties. Also, measures of non-tariff or unlimited regulation of certain types of products, as is customary in the countries of the Customs Union, will not be applied. To import goods with zero taxation, FEZ participants will need to provide a certificate confirming the resident’s participation in the FEZ register.

With the export of products from the free economic trade zone, everything is a little different. For example, if a company purchased goods within the framework of a free economic zone or specific products were manufactured with the participation of such goods, then when exporting these goods from the territory of the free economic zone, the company will be required to pay additional customs duties and fees, from which in other cases it was exempt, including import VAT .

However, there is an exception to the rule. If the goods were purchased to carry out activities in the zone, then after the expiration of the 5-year period, the products will be available for export to any other regions of Russia without customs payments and procedures.

In this case, the resident of the zone has the right to choose whether he pays VAT and customs duties for individual components of the product, or for goods produced using these components. If two or more business entities take part in the import and export of goods, then the benefits for customs duties are retained in full.

The next point is Federal Law 377, a law that provides for subsidies that reimburse the costs of FEZ participants. Such costs include fees, taxes, customs duties for goods imported for construction, equipment, and technical equipment of facilities necessary for residents of the zone to implement declared plans and projects. At this time, regulations governing the payment of subsidies of this type are at the development stage.

The same provisions in the legislation of the Russian Federation determine the status of seaports in Crimea and Sevastopol - according to the adopted amendments to the laws, they are considered free ports. On the territory of free ports they use the rules and procedures in accordance with the legislation of the Customs Union.

Also, by decision of the Government of the Russian Federation, a separate procedure for customs procedures is established in free ports. These procedures may concern the transport of passengers, vehicles, cargo, animals and various types of goods. At the moment, the Government’s decision has not yet been made, although a draft document has already been developed.

"Real estate" tax and benefits

Don't hide, don't hide

For Crimeans, paying taxes is nothing new - both transport and land taxes are already working for us. True, they are awarded only to the lucky owners of cars and land, and we still have fewer of them than home owners, who have so far been relaxed in tax terms. Now they will have to fork out money too. Moreover, you won’t be able to hide: the tax inspectorate has information about your real estate, because there is a Rosreestr database for this. Based on its data, tax notices will be prepared and sent out - a document with the accrued amount of tax, which will be calculated by the inspectorate. The notification will be sent in the traditional way - by mail. However, you can also get it in the taxpayer’s “personal account” on the official website of the Federal Tax Service, where it is easy to register and view all tax accruals. All owners of real estate (a residential building or part thereof, an apartment, a share in it or a room, a garage, a parking space, a workshop, a studio, an outbuilding with an area of ​​no more than 50 square meters) must pay the tax. Moreover, it is paid not to the owner’s registration address, but, like land tax, to the location of the taxable property. The deadline for payment is from April 1 to November 30 of the year following the expired tax period. That is, the real estate tax that will be charged to Crimeans this year will have to be paid between April 1 and November 30 (inclusive) 2021. After you receive the notification. By the way, if for some reason it did not arrive, it is better to contact the tax office yourself with your passport and take a receipt to pay the tax. We pay at the bank using the tax details indicated on the receipt.

Calculate for yourself

No, of course, you won’t be able to set your own tax amount - this is the priority of the Federal Tax Service, but you can estimate now how much money you need to set aside for future tax payments. According to the Office of the Federal Tax Service of Russia for the Republic of Crimea, a tax rate of 0.1% will be applied to a room, apartment, house (their share), garage, parking space or outbuildings owned by a person. There is no need to pay tax for the common property of an apartment building - don’t be alarmed. But millionaires whose house is valued at more than 300 million should be wary, then the tax rate increases sharply - 2%. We will be paying property taxes for the first time, so in the first three tax periods we will have reduction coefficients. 0.2 - to pay the tax for 2022, which we will pay next year. 0.4 - to pay the tax for 2021, we will pay it already in 2022. 0.6 - to pay the tax for 2022 - we will pay it in 2023. In addition, there is a tax deduction: no tax will be charged on a certain number of square meters. For example, for a room the tax deduction is the cadastral value of 10 square meters, for an apartment - 20, for a house - 50. You can find out the cadastral value of your property on the Rosreestr website. The calculation formula is simple: tax amount = (cadastral value - deduction) x tax rate x coefficient. First, we determine the amount of tax deduction for the apartment. If the cadastral value of housing, for example, is 3,500,000 rubles, then we divide this by the area of ​​the apartment 50 square meters and multiply by 20. We get the tax deduction for your apartment - 1,400,000 rubles. Now we calculate the amount of the tax itself. Cadastral value minus deduction - 3500000 - 1400000 = 2100000. We multiply by the tax rate of 0.1%, converted to a number of 0.001. We multiply the resulting amount by 0.2 - a reduction factor. We receive 420 rubles - the tax amount specific to you for an apartment with an area of ​​50 square meters and a cadastral value of 3.5 million. Using this formula, everyone can calculate their own tax amount.

Discount applies

There is good news for future property tax payers: some of them are entitled to payment benefits. For example, disabled people of groups I and II, disabled people since childhood, disabled children, combat veterans, persons exposed to radiation as a result of the Chernobyl disaster, military personnel, internationalist soldiers, pensioners (pre-retirement people) and some others. But labor veterans, as some of our readers mistakenly think, are not entitled to tax benefits, alas. But for pensioners, the basis for calculating the pension does not matter: it could be an old-age pension, a survivor’s pension, or some kind of state (military) pension. And whether the pensioner is working or not doesn’t matter either - the tax benefit will apply. But the right to tax benefits is of a declarative nature, that is, the fact that you belong to one of the preferential categories will have to be reported to the tax office, because its employees do not know about your rights to a relaxation in payments. You must declare your right to the benefit before November 1 of the next year, 2021. So don’t worry, you don’t need to drop everything and rush to the tax office - you have more than a year to do this. It will be possible to submit an application in person by contacting the local tax service department or through the “personal account” on the department’s website (you can, by the way, send it by mail or through an authorized representative at the MFC). If you fill it out on the department’s website after registration, the information in the application is entered automatically, so you just need to indicate the object for which the benefit will be issued. And when visiting a branch of the Federal Tax Service in person, you must have a passport and a benefit ID; for a pensioner, for example, a certificate from the Pension Fund stating that the applicant is a pensioner or pre-retirement will be suitable. In addition, you will need to attach documents confirming your right to this property (the same applies to beneficiaries applying for benefits for paying land or transport taxes). Tax officials will then request all the documentation they need on their own. An application with a request to take into account the benefit when paying tax has a prescribed form: a sample of filling out and the required form can either be found independently on the website of the tax service, or taken from its employees. The application is reviewed within 30 days, after which you will be notified of the decision. If the decision is positive, if you have already paid the tax, you will be able to request a recalculation of the excess paid (in the case of other taxes, if the decision is positive, the beneficiary can request a recalculation for three years). The benefit for paying real estate taxes (full exemption from payment) relies only on one property of a specific type (however, if a person does not receive income from this property, for example, does not rent it out or conduct business in it). That is, a beneficiary, say a pensioner, is simultaneously exempt from paying tax on one of the objects of each type: one apartment (share), one house, one garage. If a pensioner owns two apartments, then he will only pay tax on one. If you own an apartment, a house and a garage, you will not pay tax. The main thing is to submit your application on time. By the way, you can indicate for which property you want to take advantage of the exemption and not pay property tax. If you haven’t indicated it, then the benefit, upon confirmation, will be provided anyway, but then the tax office itself will choose the object that will be exempt from tax - the one where the tax would be the highest. And don’t forget that we will only pay property taxes next year, so there is no need to rush out and get everything done. If you are a beneficiary, you will have time to submit your application before November next year, just prepare your documents. If you are not a beneficiary and have already managed to estimate the amount of tax, then simply fill your piggy bank with rubles.

Land use and construction on the territory of the Crimean SEZ

Article 17 of Federal Law 377 defines certain procedures relating to land use and construction on the territory of the SEZ. The law will come into force in January 2022, and its application in practice will concern the placement of those facilities that are considered necessary for the implementation of investment projects planned by participants.

At the same time, it is also quite important that the land plots necessary for the participant to implement the plans will be provided by the municipality or the state for rent for a period agreed in advance - without any bidding options.

The planning of the territory of the FEZ and the development of relevant documentation, as well as decision-making in this direction will be dealt with by the Council of Ministers of Crimea or the Government of Sevastopol. Documentation on the planning of the territory and the placement of objects on it must be prepared by the participants at their own expense. Objects will be located by prior approval of the location, or in accordance with the layout of the territory. There will be no public hearings when approving the location of facilities by the Federal executive authorities. Moreover, urban planning regulations do not apply to areas intended for the placement of objects.

Preparatory work can begin even before the actual issuance of a construction permit - from the date of submission of design documents. Local authorized bodies are able to determine lists of types of preparatory work. And the permits for the construction of facilities, as well as for the commissioning of facilities, are issued by the Council of Ministers of the Republic of Crimea and the authorities of Sevastopol.

Residents and non-residents of the peninsula

The Tax Code of the Russian Federation contains general rules established for the entire territory of Russia. According to them, the tax status of people living in the territory of the Republic of Crimea and Sevastopol is determined according to general rules. That is, a resident or a non-resident.

In particular, persons who are actually present in Russia for 183 calendar days or more for 12 consecutive months are domestic tax residents. Although the income tax rate (regardless of whether it is a resident or non-resident) also depends on the type of income received, and not just on the status of the individual. It should be borne in mind that the citizenship of individuals in such cases does not matter.

Residents of the Russian Federation living on the Crimean peninsula and on whose income a personal income tax of 13% has been paid are entitled to receive tax deductions established by the Tax Code of the Russian Federation - property, standard, social and others. In accordance with the norms of the Tax Code of Russia, personal income tax in Crimea must be calculated, withheld and entered into the budget in 2022 according to generally accepted rules.

Economic interaction with mainland Russia

It is worth considering the fact that any activity of companies implies compliance with the general provisions of the Tax Code of the Russian Federation, and benefits for FEZ participants are provided only in certain cases. Such preferential provisions may be applied in favor of activities carried out by the company within the framework of the Free Economic Zone.

In other cases, benefits may only be applicable if separate accounting is maintained, the rules and regulations of which are also at the development and planning stage. It turns out that separate accounting can be difficult due to certain specifics of the company’s activities, when it is necessary to determine the scope of the agreement and those items for which business is conducted on a general basis.

Example: an entity is engaged in consulting, providing consultations both in the Crimea and in another region of Russia. Moreover, the organization is registered in a free economic zone, the central office is located here, and branches are located throughout the mainland. But the law does not provide for any restrictions or prohibitions for SEZ participants when expanding business activities to other regions of Russia.

Another option in which the working conditions in the SEZ will be of interest to mainland businessmen is the absence of prohibitions on the use of various types of transport outside the zone. That is, after a SEZ participant purchases vehicles, they can subsequently be used in operation on the mainland and in international transport.

These are primarily specialized types of transport intended for the transport of passengers and goods: buses, tractors, tractors, air, rail and water transport. However, there are some nuances here too.

Firstly, it will be impossible to use transport for personal purposes. And secondly, subsequently such vehicles will be limited in terms of their stay on the territory of mainland Russia.

Termination of the contract of a FEZ participant voluntarily and forcibly

Losing the status of a FEZ participant is possible for a number of reasons – not only when the contractual terms expire. In addition, the contract may be terminated by agreement of the parties or due to the termination of the company's activities.

Also, if certain violations were revealed during inspections, the participant may be forcibly deprived of his rights - through the courts and on the basis of provided evidence of violation of the terms of the contract. The executive authorities of Crimea and Sevastopol may demand termination of the contract through the court in cases where:

• Indication of incorrect information - underestimation of the size of capital investments with a clear difference from the figures specified in the contract, or unreasonable changes in the schedule of annual investments in the first 3 years;
• Changes in the focus of the investment project;
• Carrying out business activities on the territory of the zone that were not provided for by this agreement;
• Other violations of contractual terms for the implementation of the established investment declaration.

If this agreement is terminated due to a court decision, the FEZ participant is excluded from the unified register. Disputed issues are considered by the Arbitration Court of Sevastopol or the Arbitration Court of Crimea.

Taking into account Article 41 of Part One of the Arbitration Procedural Code, a participant in a free economic zone has the right to present its arguments in the process of considering controversial issues. He can present any evidence, try to defend his position, appeal court decisions and acts.

Legislative framework for the Special Economic Zone in Crimea

1. Federal Law of the Russian Federation dated November 29, 2014 No. 377-FZ “On the development of the Crimean Federal District and the free economic zone in the territories of the Republic of Crimea and the federal city of Sevastopol.”
2. Federal Law of the Russian Federation dated November 29, 2014 No. 379-FZ “On amendments to parts one and two of the Tax Code of the Russian Federation in connection with the adoption of the Federal Law “On the development of the Crimean Federal District and the free economic zone in the territories of the Republic of Crimea and the federal city of Sevastopol” "
3. Federal Law of the Russian Federation dated November 29, 2014 No. 378-FZ “On amendments to certain legislative acts of the Russian Federation in connection with the adoption of the Federal Law “On the development of the Crimean Federal District and the free economic zone in the territories of the Republic of Crimea and the federal city of Sevastopol.”
4. Order of the Ministry of the Russian Federation for Crimean Affairs dated 02/09/2015 No. 25 “On approval of the approximate form of an agreement on the conditions of activity in a free economic zone.”
5. Order of the Ministry of the Russian Federation for Crimean Affairs dated 02/09/2015 No. 26 “On approval of the investment declaration form.”
6. Order of the Ministry of the Russian Federation for Crimean Affairs dated 02/09/2015 No. 27 “On approval of the form of the certificate of inclusion of a legal entity, individual entrepreneur in the unified register of participants in the free economic zone.”
7. Order of the Ministry of the Russian Federation for Crimean Affairs dated 02/09/2015 No. 28 “On approval of the Procedure for the work of expert councils on free economic zone issues.”
8. Order of the Ministry of the Russian Federation for Crimean Affairs dated March 11, 2015 No. 53 “On approval of the personal composition of the expert council on issues of a free economic zone in the territory of the Republic of Crimea.”
9. Law of the Republic of Crimea dated December 29, 2014 No. 61-ZRK/2014 “On establishing the corporate income tax rate on the territory of the Republic of Crimea.”
10. Law of the Republic of Crimea dated November 19, 2014 No. 7-ZRK/2014 “On the property tax of organizations.”
11. Law of the Republic of Crimea dated December 29, 2014 No. 60-ZRK/2014 “On establishing the rate of the unified agricultural tax on the territory of the Republic of Crimea.”
12. Law of the Republic of Crimea dated December 29, 2014 No. 59-ZRK/2014 “On establishing the tax rate paid when applying the simplified taxation system in the territory of the Republic of Crimea.”
13. Order of the Council of Ministers of the Republic of Crimea “On issues of organizing the functioning of a free economic zone on the territory of the Republic of Crimea” dated December 31, 2014 No. 1639-r.

Tax benefits

In the Republic of Crimea, income tax benefits apply in accordance with local legislation. Thus, preferences apply to enterprises that have entered into an agreement to participate in a free economic zone. Condition: the reduced tariff begins to apply from the moment the organization is included in the register of payers who are participants in the FEZ. The income tax rate for this category of payers is 0%, which is valid for the first 10 years from the date the company enters the free economic zone and receives its first income.

After the first 10 tax periods, preferential rates for the following organizations:

• 2% - first three years;
• 6% - from the 4th to the 8th tax period;
• 13.5% - 9th and subsequent periods.

A company that meets the requirements for entry into the unified register of payers-participants of the FEZ has the right to take advantage of preferences, subject to maintaining separate accounting records.

SEZ management bodies

• Ministry of the Russian Federation for Crimean Affairs (regulatory and legal support for the functioning of the SEZ, maintaining a register of SEZ participants, etc.). — Address: 295000, Simferopol, st. Karl Marx, 28/10, “Liter B”. — Phone/fax: +7 10 38 (0652) 788-428. — Official website: https://mincrimea.gov.ru/
• Expert advice on SEZ issues on the territory of the Republic of Crimea and the city of Sevastopol (review and decision-making on the conclusion of agreements on the conditions of activity in the SEZ for projects with a capital investment volume of over 100 million rubles).
• Council of Ministers of the Republic of Crimea (authorized body - Ministry of Economic Development of the Republic of Crimea) and the Government of Sevastopol (authorized body - Main Directorate of Economic Development) (organizational and logistical support for the activities of expert councils, acceptance and consideration of documents, conclusion of agreements on the conditions of activity in the SEZ for projects with a volume of capital investments of up to 100 million rubles, monitoring the implementation of the terms of contracts, preparing an annual report on the results of the functioning of the SEZ).
• Ministry of Economic Development of the Republic of Crimea - Address: 295000, Simferopol, Kirova Avenue, 13 - Telephone/fax: +7 10 38 (0652) 544-294, 274-404. — Official website: https://minek.rk.gov.ru/
• Main Directorate of Economic Development of the Department of Economic Policy and Finance of the Government of the City of Sevastopol - Address: 299011, Sevastopol, st. Lenina, 2, - Office tel., reception tel.: +7 (8692) 54-47-73, fax

Prepared based on materials from the CrimeaBusinessConsulting information agency

Effect of Russian tax law

After the official recognition of the Crimean territories as federally significant, they became a jurisdiction in which Russian laws began to apply. Thus, from January 1, 2015, the legislation of the Russian Federation on taxes and fees began to be fully applied in Crimea and its capital. This means that in the territory of these subjects, local tax authorities collect personal income tax from the income of individuals based on the current version of the Tax Code of Russia.

To be more precise, from January 1, 2016, residents of the Republic of Crimea and the city of Sevastopol will pay income tax in full according to the rules that are established for all citizens of our country.