Tax Incentives and Investment Regimes

The set of available instruments depends on the type of project, the region, the amount of investment and other conditions, and the list is checked as at the date of instruction.

The mechanisms differ in the basis on which they apply: some apply where the established requirements are met, while others require a status to be obtained or an agreement to be concluded. This is how the status of a participant in the “Skolkovo” project and special economic zone regimes work; the investment tax deduction applies on the conditions in force in the relevant region, whereas the federal investment tax deduction operates under rules common to the whole country. Sector-specific incentives for IT companies are described on the IT practice page “Tax Incentives”.

The conditions of a mechanism are assessed together with the tax consequences of the investment as a whole: the benefit is weighed against the requirements that will have to be complied with throughout the period of its application.

The conditions for applying an incentive may affect the investment structure, the allocation of functions among group companies, the financing arrangements and the contractual relationships between the parties, and are therefore taken into account before the main corporate and investment decisions are made.

• Applicability assessmentA conclusion as to which mechanisms are available to the project and on what conditions.
• Comments on the structureThe incentive conditions that will need to be reflected in the corporate and contractual aspects of the project.
• Prepared documentsApplications, draft agreements and corporate resolutions.
• Support with approvalsPrepared submissions and interaction with the competent authorities.
• Application planWhat is to be documented before application begins and what is to be complied with thereafter.

The outcome of the service is the work performed within the scope agreed with the client.

1. Materials

   The work is built on the company's documents and information; the following points are relevant.

   • Project parametersType of activity, region, amount and schedule of investment.
   • StructureParticipants, group companies, allocation of functions.
   • DocumentsCorporate documents, draft agreements and contracts, financial model.
   • Statuses and regimesMechanisms applied and statuses obtained, if any.
   • Correspondence with authoritiesSubmissions and replies, if interaction has already begun.
   • Purpose of the requestAssessment of applicability, preparation of documents or support in applying the incentive.

2. Assessment

   On the basis of the materials, the risks, the possible solutions and their consequences are identified.

3. Plan

   For the chosen option, a plan is drawn up: the sequence of steps, timing and scope of work.