MIL OSI Translation. Region: Russian Federation –
The document was adopted on behalf of the President of Russia.
Decree of July 12, 2021 No. 1161
Regions in the territory of which a business can use an investment deduction for income tax (INV) are compensated for part of the shortfall in income. The rules for the distribution of subsidies for these purposes in 2021 were approved by Prime Minister Mikhail Mishustin.
INV is one of the mechanisms for encouraging investment activity. In those regions where it operates, entrepreneurs can reduce the amount of income tax paid to the regional budget by up to 90% of the volume of investments in the development of their business.
According to the rules approved by Mikhail Mishustin, territories that provide entrepreneurs with the opportunity to use investment tax deduction will be able to receive up to 200 million rubles for each company. There is a clause in the rules that the organization should not be associated with gambling, mining, finance or insurance activities.
A region requesting a subsidy needs to approve a plan to create a system for supporting investment projects. In particular, it provides for the formation of an interactive investment map, the launch of a special register and the creation of mechanisms for sustainable communication between business and government authorities.
The adopted decision will stimulate the use of the mechanism of investment tax deduction, will strengthen the financial stability of regional budgets.
The approved rules are part of a package of measures to support the regions. A significant part of Mikhail Mishustin’s report to the State Duma on May 12 was devoted to this issue. Among the main directions of the upcoming work, he named the implementation of the measures announced by the President in his Address to the Federal Assembly. These include the restructuring of budget loans, the replacement of commercial loans with budget loans, the provision of infrastructure budget loans, and, in addition, the issuance of infrastructure bonds that will allow attracting additional extra-budgetary funds for housing construction.
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.