Putin's gifts for Tatarstan: who has a chance to get tax incentives
KAMAZ, Danaflex and Kastamonu are among the applicants for SPIC 2.0
Tatarstan business groups have stood in anticipation of special investment contracts (SPIC), about which Rustam Minnikhanov spoke with Vladimir Putin during the last visit of the head of the state to Kazan. It is expected that already this spring the long-awaited amendments on granting the most favourable tax regime under SPIC will be adopted, after which the economy ministry of Tatarstan will charter 10 investment projects under it for fabulous 100 billion rubles. As Realnoe Vremya found out, the applications for agreement conclusion with the state are being prepared by those, who have already been well-treated by it — it is Kazan Danaflex, Turkish Kastamonu, for which the site of the third stage of Alabuga-3 is prepared.
Investors without privileges are not invited
At the end of last week, it became known how president Vladimir Putin responded to the request of Tatarstan President Rustam Minnikhanov to accelerate the passage of a draft law, unprecedented for domestic tax system, promising a new inflow of investments in the regional economy. Let us recall that during Putin's visit to Kazan, the head of the republic at a personal audience with him directly said that now we need special incentive measures for ''big and large projects.'' One can't argue with this as since the beginning of 2014 the volume of investments in Tatarstan, as well as in other regions, continues to decline by 3-5% a year on average. And the only winner Naberezhnye Chelny with a virtually tax-free regime of TOSER [the territory of priority development] convincingly proves that investors without benefits are not welcomed.
At the meeting with Putin, the Tatarstan president described in detail what sweet gingerbread had been prepared here. ''We have worked with the federal agencies, especially the ministry of finance, the variant SPIC 2.0 — the special investment contract, which allows to implement large projects,'' Rustam Minnikhanov shared the ''secrets''. According to him, the updated version of SPIC significantly expands the scope of tax incentives application for investing. If earlier they concerned only industry, now they can also be obtained for coming with a lot of money to communications, agriculture, transport infrastructure development, space, mineral processing and digital technology (six industries in total). The Tatarstan president paid special attention to the fact that this ''delicious'' draft bill should be adopted as soon as possible. ''It has been agreed at the level of the ministry of finance, now it is being in the government, it is necessary to adopt it at the spring session,'' he asked. As it turned out, just two weeks later, the president of the Russian Federation convened the Presidium of the State Council on development of industrial potential in Rostov-on-Don, where Minister of Finance Anton Siluanov clearly explained what SPIC 2.0 was.
Anton Siluanov: SPIC will ''speak'' by this spring
''We have prepared a new format of this instrument — the special investment contract, which covers an expanded list of industries,'' he said. According to the head of the ministry of finance, investors will receive a huge package of preferences, including not only the nullification of income tax, the mechanism of return reinvestment of taxes in infrastructure construction, but also the state guarantee to maintain a comfortable regime of doing business during the period of SPIC validity. The maximum possible period is 10 years.
''Investors are provided with conditions such as the stability of tax base, benefits for those investments that direct investors in infrastructure, in fact, we will return these benefits to investors at the expense of additional taxes that will be received from this project,'' he explained.
An additional bonus will be the giving investors the status of the only supplier in public procurements, that is, they will receive the exclusive right to sell their products to the state without competition. ''We will also take into account the priority of the products that will be produced under this special investment contract in public procurements. In fact, it is the contract between the state and the investor for investing and, accordingly, it guarantees stable conditions and further sale of the products that will be produced as the result of these investments,'' he said. In conclusion, he promised ''to promote in every way, so that it (the draft bill — editor's note) was adopted at the spring session of the parliament.''
The investor cannot be ''burdened'' at more than 7%
Private investors avoid large and risky projects under the current tax regime, therefore, it is necessary to restructure investment mechanisms, the Ministry of Finance of the Russian Federation agrees with the ideas of Tatarstan. According to the ministry, the investor has to pay 20% in the form of taxes to the treasury from each invested ruble in the modernization of production, while in Europe there is a sparing tax burden — less than 7%. In fact, they want to bring private investors to this figure through signing SPIC 2.0.
''To accelerate the implementation of industrial projects involving private investments, the ministry of finance jointly with the ministry of industry have prepared a package of regulatory legal acts, including the draft federal law ''On special investment contracts and amendments to certain legislative acts of the Russian Federation.'' The updated mechanism of SPIC will generate projects annually at the amount of no less than 5 trillion rubles, including no less than 1 trillion rubles of private investments,'' the press service of the Ministry of Finance of the Russian Federation informed Realnoe Vremya.
Nevertheless, they do not expect sky-high investments in Tatarstan, they treat the format of SPIC 2.0 more realistically. ''First, the threshold for obtaining SPIC 2.0 should be at least 1 billion rubles, that is, only the investor's own funds. This means that the maximum capacity of the project, taking into account the attracted bank loans, will not exceed 10 billion rubles,'' deputy minister of economy of Tatarstan Bulat Khaziakhmetov, who participated in the development of the draft bill, explained to Realnoe Vremya. Such projects can't be many — they are few. According to him, 10 large investment projects have been selected in Tatarstan, which theoretically will generate 100 billion rubles. ''Suffice it to say that the project on the construction of the ethylene complex at Nizhnekamskneftekhim alone will cost 40 billion rubles,'' the deputy minister said.
Among those who have the opportunity to sign SPIC — the Kazan company Danaflex with the project of launching a new packaging film, the Turkish manufacturer of floor covering Kastamonu. President of Danaflex Ayrat Bashirov confirmed the fact of agreement preparation, but declined to comment. ''It has not been accepted yet, there is nothing to comment on,'' he said sadly. Kastamonu did not answer to the request.
What will private investors get in return? According to Bulat Khaziakhmetov, the companies-signatories of SPIC will be fully exempt from income tax to both federal and reginal budgets for the entire period of the special contract. In addition, the republican budget will return them taxes paid in the construction of industrial facilities. He found it difficult to call the estimated value of the falling incomes, referring to the fact that the calculations had not been carried out yet. At the same time, the deputy minister added that, the regional SPIC, which were introduced by the State Council a year ago, will continue to operate in parallel with the federal SPIC 2.0. ''Now at the stage of signing there is an agreement with KAMAZ, which has been given a zero income tax until 2025, and the property tax will be paid at a reduced rate of 0,1% (at the current 2,2%),'' Khaziakhmetov explained.
Most likely, the majority of SPIC signatories will be located on the territory of Alabuga-3, but will not fall under the tax regime of the SEZ. ''SPIC cannot not be applied to residents of special economic zones. But some support measures provided by SPIC coincide with those of SEZ, for example, the benefit on income tax,'' said director of the Department for corporate affairs at SEZ PPT Alabuga JSC Mikhail Mironov.
According to him, the specialists of SEZ PPT Alabuga were attracted by the Russian ministry of finance in the development of SPIC 2.0 as they have significant experience and serious competencies in attracting investments and implementing major investment projects. ''In particular, we made the list of 10 major investment projects that can be implemented in Tatarstan in the future, analyzed the requirements of investors and, in accordance with them, offered appropriate benefits. Among the wishes of investors — to reduce the share of own funds in the project and to increase the share of borrowed funds, to reduce the requirements for collateral. SPIC 2.0 is mainly formed on the basis of this analysis,'' he said.
The state becomes obliged to compensate the losses
''The main achievement of SPIC is the duty of the state to compensate the investor for deterioration in the economic situation,'' said deputy head of the Chamber of Commerce of Tatarstan Artur Nikolaev. ''The SPIC agreement will clearly prescribe this paragraph, and if the regional authorities do not fulfill it, they will be liable.''
As noted by head of the consulting company Vernoe Reshenie Sergey Maslyokhin, ''the SPIC mechanism was introduced at the federal level in the summer of 2015 by the law ''On industrial policy'' and the special decree of the government of the Russian Federation.'' But now they want to integrate it into the tax legislation. This is already a stronger guarantee for the investor than the act, which can always be canceled. ''With these legislative safeguards, it is possible to go for a long investment Hajj. If earlier the investor was obliged to invest in the project at least 750 million rubles, now the threshold has been extended to 1 billion rubles. As for the state's obligation to compensate for losses, we can say that there have been no judicial precedents so far. Although I remember the Swedish investor IKEA was indignant that it was given incorrect data about customer traffic in Kazan, but it did not get further than words,'' says Maslyokhin.