Incentives and benefits

Tax incentives

Tax incentives provided for businesses engaged in modernization of production facilities

Law of Kaluga Region No. 263-OZ of November 10, 2003 "On the property tax of organizations" is currently in effect in Kaluga Region.

According to this Law business property tax equals 1.1% for newly created or acquired property (within a tax period) and for modernized (reconstructed) fixed assets (within a tax period) in respect of the value added in connection with such modernization (reconstruction).

Besides, starting from January 1, 2013 pursuant to subparagraph 12, paragraph 1, article 3 of the Law, tax exemption will be provided to organizations in respect of reconstructed, modernized, upgraded property and/or additionally acquired equipment under production facilities modernization program duly registered in accordance with Kaluga Region laws, if the relevant investments amounts are as follows:

• from 10 to 30 million rubles — for a single tax period;
• from 30 to70 million rubles — for two tax periods;
• over 70 million rubles — for three tax periods.

The law amending Kaluga Region Law No. 621-OZ of December 29, 2009 "On reduced tax rate of corporate income tax payable to the budget of the Kaluga region for investors carrying out investing activities in Kaluga Region"  is currently in effect.

According to the law, if a taxpayer invests funds within the framework of production facility modernization program, the income tax rate will depend on the amount of capital investments in reconstruction, modernization, upgrading and/or acquisition of additional equipment for manufacturing needs in accordance with the production facility modernization program and will be calculated as follows:

• from 10 to 30 million rubles — 15%;
• from 30 to 70 million rubles — 14%;
• over 70 million rubles — 13,5%.

Investors included in the production facilities modernization program registry shall be entitled to apply a lower tax rate when calculating business income tax for the period, in which such capital investment amount, calculated on a cumulative total basis, has reached the relative sum within the period between January 1, 2013 and December 31, 2015.

Preferential customs treatment

In case of export/import of goods in the territory of the Customs Union (hereinafter – CU) the following customs fees are applied in accordance with the terms of the Customs Code of the CU:

• import customs duty;
• export customs duty;
• value added tax levied on goods imported into the customs territory of the Customs Union;
• excise tax (excise duty) charged (levied) on goods imported into the customs territory of the Customs Union;
• customs fees.

For the purposes of customs duties goods are categorized and classified according to the Commodity Nomenclature of Foreign Economic Activity of the Customs Union (FEACN CU, web information link — http://www.tks.ru/db/tnved/tree).

Customs duty rate is a certain value that serves as a basis for the calculation of customs duties. Customs duty rate is set for each product category and applies to goods crossing customs borders of the Customs Union.

Only the federal government can set customs duty rates. Kaluga Region does not grant any customs duty relief.

Tariff privileges (tariff preferences) for goods are defined by the Law and may not be defined individually, except for cases provided for in articles 35, 36 and 37 of the RF Law on customs tariff . Tariff privileges are granted only by a decision of the government of the Russian Federation.

Tariff privileges (tariff preferences) are privileges provided on the basis of reciprocity, or unilaterally in accordance with the trade policy of the Russian Federation in respect of goods transported across the customs border of the Russian Federation in the form of previously paid duty refund, duty exemption, or reduced duty rates, or preferential tariff quotas for imported (exported) goods.

Value added tax (VAT), excise duty and customs duties are customs payments. VAT and excise duty shall be paid in accordance with the Tax Code of the Russian Federation.

In accordance with Article 164 of the Tax Code of the Russian Federation when VAT is imposed on goods transported across the customs border of the Russian Federation three types of rates are applied: zero rate, 10% and 18%.

Zero VAT rate imposed on the sale of:

• goods (except for oil, including stable gas condensate and natural gas exported to territories of member states of the Commonwealth of Independent States) exported in accordance with customs export procedure;
• works (services) directly involved in the production and sale of said goods;
• works (services) directly associated with the carriage (transportation) across the territory of the Russian Federation of goods placed under the customs procedure for transit through that territory;
• carriage of passenger and luggage;
• works (services) performed (rendered) directly in outer space, as well as the scope of preparatory ground works (services) technologically determined and inextricably connected with works (services) performed (rendered) directly in outer space
• precious metals by taxpayers extracting such or producing the former from scrap and waste containing precious metals;
• goods (works, services) for official use by foreign diplomatic representations and agencies equated to such or for personal use by diplomatic or administrative-clerical personnel of such agencies, including members of their families staying with them.

10 % rate applies to the sale of books, food products, certain medical goods and goods for children listed in paragraph 2 of Article 164 of the Tax Code of the Russian Federation. Sale of other products is taxed at 18 %.

Based on Article 150 of the Tax Code of the Russian Federation importation of the following goods to the territory of the Russian Federation is VAT exempt:  

• goods (except excisable goods), imported as gratuitous aid (assistance) to the Russian Federation;
• medical goods listed in subparagraph 1 of paragraph 2 of article 149 of the Tax Code of the Russian Federation, as well as the raw material and component parts for their production;
• materials for production of medical immunobiological drugs for diagnostics, prevention and/or treatment of infectious diseases;
• valuable articles of art handed over as gifts to establishments and referred by law of the Russian Federation to highly valuable articles of cultural and national heritage of the peoples of the Russian Federation;
• all types of printed publications received by state and municipal libraries and museums under international exchanges of books and also of products of cinematography imported by specialized state organizations for the purposes of international non-commercial exchanges;
• products manufactured as a result of economic activity of Russian organizations on land plots being the territory of a foreign state covered by the Russian Federation's right of land use on the basis of an international treaty;
• process equipment, components and spare parts thereto imported as a contribution to authorized (pooled) capitals of organizations;
• raw natural diamonds;
• goods intended for official use by foreign diplomatic representations and agencies equated thereto, and also for personal use by diplomatic and administrative-clerical personnel of these agencies, including members of their families living with them;
• currency of the Russian Federation and foreign currency, notes being legal tender (except for those intended for collecting), and also financial credit instruments - shares, bonds, certificates, bills of exchange;
• sea products caught and/or processed by the fishing-production enterprises (organizations) of the Russian Federation.

According to Article 183 of the Tax Code of the Russian Federation the import to the territory of the Russian Federation of excisable goods which were refused in favor of the state and which are to be transferred into the state and/or municipal property shall not be taxable (shall be exempt from taxation).

In accordance with Article 72 of the Customs Code of the Customs Union Customs Code of the Customs Union , customs fees are compulsory payments collected by customs authorities for operations of goods release, customs  escort of goods, as well as other operations prescribed by the Customs Code of the Customs Union and (or) by the laws of the member states of the Customs Union (see also Article 14 of the Law).

Customs fees:

1) customs fees for operations of goods release (further referred to as — customs fees for customs operations);

2) customs fees for customs escort of goods;

3) customs fees for goods storage.

Customs fees for customs operations must be paid before the filing of the customs declaration or simultaneously with the filing thereof.

Customs fees for customs escort of goods must be paid before actual initiation of the customs escort procedure.

Customs fees for customs escort amount to:

• fees for customs escort of each motor vehicle and each unit of railway rolling stock to the distance of:
• up to 50 km inclusive — 2 000 rubles;
• from 51 to 100 km inclusive — 3 000 rubles;
• from 101 to 200 km inclusive — 4 000 rubles;
• more than 200 km — 1 000 rubles for each 100 kilometers but no less than 6 000 rubles;
• for customs escort of each ship or aircraft — 20 000 rubles, irrespective of the distance (Art. 130 of the Law).

Customs fees for customs operations are not charged in respect of:

1) the goods imported into the territory of the Russian Federation  or exported from the territory of the Russian Federation that fall into the category of gratuitous aid (assistance) according to the legislation of the Russian Federation;

2) the goods imported into the Russian Federation or exported from the Russian Federation by diplomatic missions, consular institutions, other official missions of the foreign states, by international organizations, staff of such missions, institutions and organizations, as well as in respect of the goods intended for personal use by certain categories of foreign persons enjoying benefits, privileges and (or) immunities in accordance with international agreements joined by the Russian Federation;

3) cultural valuables submitted for the customs procedures of temporary
import (admission) or export by Russian state or municipal museums,
archives, libraries and other state depositories of cultural valuables for the
purpose of their exhibition; the same exemption covers completion of the said
procedures by submitting of the goods for the procedures of re-export and re-
import, respectively;

4) the goods imported into the Russian Federation or exported from the Russian Federation for the purpose of display at exhibition and congress
arrangements participated by foreigners, at aviation and space shows and
other similar events on resolution of the Government of the Russian
Federation;

5) cash currency of states — members of the Customs Union imported or exported by the central banks of states — members of the Customs Union, with the exception of commemorative coins; 

6) the goods (except for personal use goods) imported into the Russian
Federation or exported from the Russian Federation by the single forwarder to the address of the single recipient and accompanied by the single
transportation (shipping) document, provided that total customs value of such
goods does not exceed the amount equivalent to 200 euros at the rate of the
Central Bank of the Russian Federation effective at the time of registration of
the customs declaration by the customs authority;

7) the goods submitted for the customs transit procedure;

8) TIR-carnet forms transported between Association of International
Road Carriers of Russia and International Road Transport Union, as well as ATA-carnet forms or parts thereof intended for use within the customs territory of the Customs Union;

9) excise labels imported into the Russian Federation and exported from the
Russian Federation;

10) the goods transported by natural persons for private, family, domestic
and other purposes unrelated to business activities that are fully exempt from
customs duties and taxes;

11) the goods forwarded as international postal items, except for the cases of
declaring such goods by way of filing individual customs declaration;

12) the goods imported into the Russian Federation or exported from the Russian
Federation as stores;

13) the goods submitted for special customs procedures, including when
these goods are submitted for the procedures required for completion of such
special procedures;

14) waste products (remnants) of the foreign goods destructed in accordance
with customs destruction procedure that are exempt from customs duties and
taxes;

15) the goods that became destructed, irretrievably lost or damaged as a
result of accident or force majeure circumstances and were submitted for the
customs destruction procedure;

16) the goods arrived at the territory of the Russian Federation and situated
in the arrival place or another customs control zone located in close proximity
to the arrival place, not submitted for any customs procedures or submitted to re-export procedure and leaving the territory of the Russian Federation;

17) the goods temporarily imported into Russian Federation with application of ATA carnets in case of fulfillment of the conditions of temporary goods import with application of ATA carnets and subsequently- re-exported from the Russian Federation, as well as in respect of the goods temporarily exported from the Russian Federation with application of ATA carnets (in case of fulfillment of the conditions for temporary goods export with application of ATA carnets) and subsequently re-imported into the Russian Federation;

18) spare parts and equipment imported into the Russian Federation or exported from the Russian Federation simultaneously with the motor vehicle in accordance with Article  349 of the Customs Code of the Customs Union;

19) international transportation vehicles, including those released into the territory of the Russian Federation in accordance with the customs procedures of temporary import (admission) or free custom zone and subsequently used in the capacity of international transportation vehicles;

20) professional equipment determined by the Government of the Russian Federation and used by mass media, submitted for the customs procedures of temporary export (the same exemption covers completion of the said procedures by submitting of the goods for the procedures of re-import);

21) the goods used for making films, performances, plays and similar events (theater costumes, circus costumes, cinema costumes, stage equipment, musical scores, musical instruments and other theater, circus and cinema property) submitted for the customs procedures of temporary import (admission) or temporary export, including when re-exported or re-imported, provided that such goods are subject to full conditional exemption from customs duties and taxes;

22) the goods intended for sporting events, exhibition sporting events or trainings submitted for the customs procedures of temporary import (admission) or temporary export; the same exemption covers completion of the said procedures by submitting the goods for the procedures of re-export, provided that such goods are subject to full conditional exemption from customs duties and taxes;

23) the goods imported into the territory of the Kaliningrad Region in accordance with the customs procedure of free custom zone as well as the products of such goods processing submitted for the custom procedures of release for domestic consumption or re-import;

24) scientific and commercial items imported into the Russian Federation in accordance with the customs procedure of temporary import (admission) on the terms of full conditional exemption from customs duties and taxes, or exported from the Russian Federation in accordance with the procedure of temporary export;

25) other cases determined by the Government of the Russian Federation.

Customs fees for storage of goods are not charged in respect of:

1) storage of goods in the temporary storage warehouse held by customs authorities;

2) other cases defined by the Government of the Russian Federation;

3) the Government of the Russian Federation may define the cases of exemption from the customs fees for customs escort.

back