Creating a special economic zone (SEZ) in Crimea would be difficult and legislation on areas of accelerated development is more likely to be applied to the Black Sea peninsula, Russian Deputy Finance Minister Sergei Shatalov believes.
“The issue was raised that there will be a special economic zone
there, but apparently, I suspect, there won’t be an SEZ there,” Shatalov
told reporters.
He said creating an SEZ in Crimea would be fraught with many
difficulties, including issues of customs regulation, and the
advisability of creating such a zone is not clear. “SEZ, at least in the
form that they have been constructed here so far, are barbed wire with a
special tax and customs regime. Building such a complex system for
Crimea, on one hand, is difficult, and on the other there’s no
particular need,” Shatalov said.
It is more likely that legislation on areas of accelerated
development will be implemented in Crimea, he said. “But since such
legislation does not exist yet, it is premature to talk about this,
although there are such ideas,” Shatalov said.
Rules for taxation of investment projects that are provided for a
number of regions in Trans-Baikal and the Far East will also be
implemented in Crimea. In its draft tax policy guidelines for 2015-2017,
the Finance Ministry states that Crimea and Sevastopol will be included
in the list of Russian regions where investment projects enjoy a number
of tax breaks. Such regions now include Buryatia, Yakutia, Tuva,
Trans-Baikal, Kamchatka, Primorye, Khabarovsk Territory, Amur, Irkutsk,
Magadan and Sakhalin regions, as well as the Jewish Autonomous Region
and Chukotka.
Regional investment projects in these regions can be eligible for
breaks on corporate profit tax, the natural resource extraction tax, and
regional and local taxes.
Prime Minister Dmitry Medvedev said on April 18 that he expects the
Economic Development Ministry to soon draft proposals for creating an
SEZ in Crimea. “It is necessary to understand what kind of special
economic zone should be created there and on what principles,” Medvedev
said.
