Putin withdraws increased income tax on LNG exports by Gazprom and its subsidiaries

MOSCOW, February 17 – RIA Novosti. Russian President Vladimir Putin signed lawExempting Gazprom and its subsidiaries from increased income taxes for liquefied natural gas (LNG) exporters. The document is published on the official portal of legal information.

In November last year, a law was passed for 2023-2025 increasing the income tax rate from 20% to 34% for LNG exporters who have exported at least one batch of such gas by the end of 2022.

The new law removes Gazprom and its subsidiaries from the increased income tax rate. This change will apply to legal relationships arising from 1 January 2023.

In 2023-2025, the 34% profit tax will be payable only by users of federal subterranean lands whose licenses provide the construction or liquefaction aspect of an LNG plant as of January 1, 2013. Gas produced at such a facility for liquefaction or other federal subsoil lands licensed after January 1, 2013. Thus, Gazprom and its subsidiaries were exempted from the said increase rate.

In addition, the law extends the deadline for the completion of the modernization of oil refining capacities required to levy reverse excise duty on petroleum raw materials. This is due to restrictions on the export of technologies currently imposed on the Russian Federation: if foreign suppliers refuse to supply equipment, you have to order new ones, said Alexei Sazanov, Deputy Minister of Finance of the Russian Federation.

The amendments also clarify the rules for taxation of transactions with benzene, paraxylene, orthoxylene, and in this case, the conditions for providing tax breaks.

The law enters into force from the date of publication, and the rules for the modernization of benzene, paraxylene, orthoxylene and oil refining capacities – one month after its publication, but not earlier than the first day of the next excise tax period.