Ministry works on bill to zero VAT for ship repair yards

MOSCOW, Dec 24 (PRIME) -- The Russian Industry and Trade Ministry has adjusted and sent for new coordination a bill to zero value-added tax (VAT) for Russian ship repair yards, as seen by PRIME on Thursday in the materials of the authority prepared for a meeting of the Federation Council, the parliament’s upper house.

Previously, the ministry said that the Russian shipyards and ship repair yards lost their competitiveness in commercial repairs as the Russian fleet of ships used in international shipping chose foreign shipyards due to ambiguity in definition and application of the Tax Code.

Besides the zero VAT rate, the ministry suggested reimbursement to up to 30% of costs of the Russian shipyards on construction of small and mid-sized fishing ships. Boris Kabakov, head of the ministry’s department for the shipbuilding industry and maritime machines, told the Federation Council that the ministry expects the government to approve the reimbursement until the end of 2019 as the budget has already earmarked the money for it.

The ministry also suggested allocation of money from the National Wealth Fund on the leasing of civil ships at preferential terms starting from 2020 in the form of a capital injection into State Transport Leasing Company (STLC).

“Currently, the three-year budget earmarked 10 billion rubles on support of leasing to diversify the sector…But taking into account the capacities and potential demand, United Shipbuilding Corporation and other shipyards are ready to contract and build up to 495 civil ships until 2031. This demands a 105 billion ruble capital injection into STLC. We suggest considering investment of the National Wealth Fund’s money starting from next year as a possible source,” the materials read.

(62.2499 rubles – U.S. $1)

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