Investors of the Republic of Tatarstan! Pay attention to the mechanism of the agreement on the protection and promotion of investments
The Investment Promotion and Protection Agreements (IPPAs) is an investor's agreement with the authorities, under which the business invests money in the project, and the state undertakes to fix the conditions of the applicable legislation, benefits and support measures on which this project is implemented. Such a guarantee of the stability of the legal regime is issued for a period of up to 6, 10, 15 or 20 years and distinguishes this mechanism from others.
Head of the Tatarstan Investment Development Agency Taliya Minullina: "IPPAs projects are already in operation in the republic: this is PJSC Tatneft with investments in the amount of 194.3 billion rubles, JSC TAIF for 1.7 trillion. rubles, SEZ "Alabuga" for 174 billion rubles and others. It is planned to conclude republican IPPAs for 7 more projects with investments totaling about 250 billion rubles, some of which are supervised by the Agency.
Investors should pay attention to this mechanism: it is suitable for many industries, the initial investment amount for the project has been reduced to only 200 million rubles. In addition, this is the first investor assistance mechanism that has undergone a digital transformation at the federal level, so it is convenient to submit documents and monitor the consideration of the project in electronic format."
In October, Tatarstan adopted all the necessary legal documents for the conclusion of regional agreements on the protection and promotion of investments:
- Resolution of the Cabinet of Ministers of the Republic of Tatarstan dated 07.10.2022 No. 1084 "On approval of the Procedure for evaluating an investment project in respect of which it is planned to conclude an agreement on the protection and promotion of investments for the effective use of the budget of the Republic of Tatarstan"
- Resolution of the Cabinet of Ministers of the Republic of Tatarstan dated 07.10.2022 No. 1085 "On approval of the procedure for monitoring the implementation of the Terms of the Agreement on the protection and promotion of Investments and the Conditions for the Implementation of the Investment project in respect of which such an agreement has been concluded, including the stages of its implementation"
- Resolution of the Cabinet of Ministers of the Republic of Tatarstan dated 07.10.2022 No. 1086 "On approval of the Rules for Concluding, Amending, and Terminating Agreements on the Protection and Promotion of Investments to which the Republic of Tatarstan is a Party and the Russian Federation is not"
Two fundamental elements of the IPPAs design:
- the obligation of the public party not to apply acts that change the conditions for the implementation of the project,
- the right, not the obligation of the investor to implement the project.
The "stabilization clause" includes tax conditions:
- on income tax
- property tax
- transport tax
- terms of payment and procedure for VAT refund
- new taxes and fees, conditions of land use and urban development
With investments of 15 billion rubles or more, non-tax payments (for up to 3 years) and export customs duties can also be included in it.
Municipalities will be able to include in the stabilization clause a land tax, separate acts in the field of land use and urban development.
The organization implementing the project may be provided with state support measures in the form of cost recovery and (or) tax deduction. We are talking about covering the costs of construction and modernization of transport, energy, utilities and information systems necessary for the successful launch of investment projects.
In addition, the federal budget reimburses expenses for the payment of interest on loans and coupon income on bond loans attracted for the creation of infrastructure. Cost recovery will take from 5 to 11 years, depending on the type of infrastructure facility and the terms of a specific agreement. The Ministry of Economic Development of Russia will provide such subsidies.
The maximum amount of reimbursable costs cannot exceed:
- 50% of the actual costs incurred for the facilities of the supporting infrastructure
- 100% of the actual costs incurred for related infrastructure facilities
Related infrastructure facilities are subject to transfer to state (municipal) ownership or to the ownership of a regulated organization.
The maximum amount of reimbursable costs is limited by the amount calculated by the organization for payment to the budget:
- corporate income tax
- corporate property tax, transport tax
- VAT (less tax reimbursed to the organization)
- import customs duties
The mechanism for concluding an agreement has a declarative procedure, the implementation of which is provided for in electronic form on the basis of the state information system (GIS) "Capital Investments", which already allows for the conclusion of IPPAs in electronic form.
Registration for investors and authorities, as well as more detailed information with step-by-step instructions: https://invest.nalog.gov.ru/
Head of the Tatarstan Investment Development Agency Taliya Minullina: "IPPAs projects are already in operation in the republic: this is PJSC Tatneft with investments in the amount of 194.3 billion rubles, JSC TAIF for 1.7 trillion. rubles, SEZ "Alabuga" for 174 billion rubles and others. It is planned to conclude republican IPPAs for 7 more projects with investments totaling about 250 billion rubles, some of which are supervised by the Agency.
Investors should pay attention to this mechanism: it is suitable for many industries, the initial investment amount for the project has been reduced to only 200 million rubles. In addition, this is the first investor assistance mechanism that has undergone a digital transformation at the federal level, so it is convenient to submit documents and monitor the consideration of the project in electronic format."
In October, Tatarstan adopted all the necessary legal documents for the conclusion of regional agreements on the protection and promotion of investments:
- Resolution of the Cabinet of Ministers of the Republic of Tatarstan dated 07.10.2022 No. 1084 "On approval of the Procedure for evaluating an investment project in respect of which it is planned to conclude an agreement on the protection and promotion of investments for the effective use of the budget of the Republic of Tatarstan"
- Resolution of the Cabinet of Ministers of the Republic of Tatarstan dated 07.10.2022 No. 1085 "On approval of the procedure for monitoring the implementation of the Terms of the Agreement on the protection and promotion of Investments and the Conditions for the Implementation of the Investment project in respect of which such an agreement has been concluded, including the stages of its implementation"
- Resolution of the Cabinet of Ministers of the Republic of Tatarstan dated 07.10.2022 No. 1086 "On approval of the Rules for Concluding, Amending, and Terminating Agreements on the Protection and Promotion of Investments to which the Republic of Tatarstan is a Party and the Russian Federation is not"
Two fundamental elements of the IPPAs design:
- the obligation of the public party not to apply acts that change the conditions for the implementation of the project,
- the right, not the obligation of the investor to implement the project.
The "stabilization clause" includes tax conditions:
- on income tax
- property tax
- transport tax
- terms of payment and procedure for VAT refund
- new taxes and fees, conditions of land use and urban development
With investments of 15 billion rubles or more, non-tax payments (for up to 3 years) and export customs duties can also be included in it.
Municipalities will be able to include in the stabilization clause a land tax, separate acts in the field of land use and urban development.
The organization implementing the project may be provided with state support measures in the form of cost recovery and (or) tax deduction. We are talking about covering the costs of construction and modernization of transport, energy, utilities and information systems necessary for the successful launch of investment projects.
In addition, the federal budget reimburses expenses for the payment of interest on loans and coupon income on bond loans attracted for the creation of infrastructure. Cost recovery will take from 5 to 11 years, depending on the type of infrastructure facility and the terms of a specific agreement. The Ministry of Economic Development of Russia will provide such subsidies.
The maximum amount of reimbursable costs cannot exceed:
- 50% of the actual costs incurred for the facilities of the supporting infrastructure
- 100% of the actual costs incurred for related infrastructure facilities
Related infrastructure facilities are subject to transfer to state (municipal) ownership or to the ownership of a regulated organization.
The maximum amount of reimbursable costs is limited by the amount calculated by the organization for payment to the budget:
- corporate income tax
- corporate property tax, transport tax
- VAT (less tax reimbursed to the organization)
- import customs duties
The mechanism for concluding an agreement has a declarative procedure, the implementation of which is provided for in electronic form on the basis of the state information system (GIS) "Capital Investments", which already allows for the conclusion of IPPAs in electronic form.
Registration for investors and authorities, as well as more detailed information with step-by-step instructions: https://invest.nalog.gov.ru/
16.11.2022