RF Ministry of Finance backs setting zero VAT for ship repair companies if their entire profit is spent for development
It will be an essential support of ship repair companies
Russia’s Ministry of Finance has backed setting a zero VAT for ship repair companies if their entire profit is spent for the development as the state measure aimed at supporting ship repair companies, Irina Orinicheva, Deputy Director of the Shipbuilding and Marine Equipment Department at the Ministry of Industry and Trade, said at the Ship Repair, Modernization and Components conference organized by PortNews Media Group.
“The Ministry of Finance has backed this measure (setting a zero VAT for ship repair companies – Ed.) if the companies’ entire profit is spent for their development, - said Irina Orinicheva. — The next step is to introduce amendments into the Tax Code and to develop regulations. So we expect the process to proceed faster and zero VAT to be set as an essential support of ship repair companies.”
The proposal on setting a zero VAT for works on repair of domestic ships at Russian shipyards has been under discussion from 2019. In March, the Ministry of Industry and Trade addressed Prime Minister Mikhail Mishustin with a request to support civil sector of ship repair industry amid sanctions by setting a zero VAT for repair of commercial ships. In August, at the meeting on developing the shipbuilding industry held by Vladimir Putin, Denis Manturov, Deputy Prime Minister – Minister of Industry and Trade, told the President about the solution found. “We worked together with the Finance Ministry and found a way to offer zero-rate VAT for ship repairs, on the condition that providers sign investment contracts with us and undertake to invest the profit they make in upgrades, which in fact will pave the way to creating a new sector. We are now drafting corresponding amendments to the Tax Code with our colleagues,” said the Deputy Prime Minister.
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