Sergei Ivanenko expresses concern at the attempts of the Finance Ministry to change the tax regime of PSAs

The Head of the Duma Commission for Production-Sharing Agreements (PSAs) Sergei Ivanenko and Chairman of the Duma Committee for the Budgets and Taxes Alexander Zhukov expressed their concern at the attempts of the Finance Ministry to change the tax regime of PSAs. Today the Finance Ministry has prepared a draft law devoted to the tax regime at the time of the actual implementation of production-sharing agreements. If this draft is adopted, the investor will pay 20 taxes instead of the four taxes he pays at present.

Ivanenko told journalists: "The production-sharing scheme, plus taxation is being introduced instead of the replacement of taxation by production- sharing fixed in the law. In addition, instead of the special order on the recovery of an investors costs, the draft proposes adjusting the PSA to the general principles for taxing profits with exceptions".
Zhukov in turn noted that if the draft developed by the Finance Ministry was adopted, the conditions for attracting investments to Russia would deteriorate considerably. Consequently Zhukov and Ivanenko suggested that the government should agree with the Ministry of Finance and the State

Duma proposals on legislation regarding the taxation of PSAs, and also hold talks with potential investors. According to Zhukov, a deputies draft of the chapter of the Tax Code covering PSAs was submitted to the Duma. The draft was rated highly by Russian and potential foreign investors. Ivanenko also stressed that PSA legislation could lead to annual investments of USD 8-10 billion in Russia.

Based on RBC reports

See also:
Production Sharing Agreements section of the web-site
http://www.eng.yabloko.ru/Hotissues/Economy/PSA/index.html