Chelyabinsk Region IT companies to enjoy 5-years' property tax exemption

The Deputies of the Regional Assembly have adopted amendments to two laws pertaining to the Chelyabinsk Region: Corporate Property Tax Law and Law on Reducing Profit Tax Rates for Individual Taxpayer Categories.

Chelyabinsk Region IT companies to enjoy 5-years' property tax exemption

The Deputies of the Regional Assembly have adopted amendments to two laws pertaining to the Chelyabinsk Region: Corporate Property Tax Law and Law on Reducing Profit Tax Rates for Individual Taxpayer Categories. The amendments shall be enacted from the date on which they are officially published.

All IT companies operating in the Chelyabinsk Region will be exempt form property tax for 5 years subject to being accredited with the Ministry of Communications and Media of the Russian Federation. According to the Region's Ministry of Communications, there are 56 such companies in the Region. These companies will also maximally benefit from profit tax as the applicable tax rate is going to be reduced to 13.5%. The amendments are aimed at driving IT development in the Region.

Moreover, support will be received by companies investing in IT and movable radiotelephony services as this is the area where tax rates will be reduced in proportion to amounts invested.

Apart from IT companies, the residents of advanced social and economic development territories will also be exempt from property tax (for 10 years) and profit tax (for 5 years). Special tax treatment will be provided to the residents of the Chelyabinsk Region's special economic zones. The rate of profit tax will be kept at 2% within 5 years, starting from the period when the relevant profits were received; during the following 5 years, the applicable corporate profit tax rate will equal 7%; then the applicable profit tax rate for SEZ residents will be 13.5%.

The minimum property tax rate of 1.1% will be granted to investment projects that are included in the short list of the Chelyabinsk Region's top priority investment projects. In order to get into the list, companies now need to participate in a competitive selection – it will be sufficient to only file an application to be considered by competent authorities.