The Ministry of Economic Development will prepare amendments to the law on IPPA and the Tax code of the Russian Federation, which are proposed in the future to replace the mechanism for providing subsidies for tax deduction. This was announced on Friday, September 4, by the Minister of economic development of the Russian Federation Maxim Reshetnikov at a meeting with investors during a working trip to the Irkutsk region.

"This will significantly simplify the procedure and reduce the time for reimbursement of infrastructure costs due to newly received taxes," the head of the Department said. He clarified that all previously agreed approaches – the application procedure and confirmation of the validity of expenses by technological and price audits and state expertise will be preserved.

At the same time, within the framework of budgetary legislation and the current version of the law on IPPA, in order to give investors the opportunity to apply for the specified support measure and fix the mechanism of long-term subsidies, a procedure for reimbursing infrastructure costs will be adopted, which provides for subsidies from "two windows": for federal taxes - from the federal budget, for regional - from the budgets of the respective constituent entities of the Russian Federation. The Ministry of Economic Development has already prepared a corresponding draft government decree and published it for public discussion on the Federal portal of draft regulatory legal acts on September 4.

This procedure provides for the possibility of providing subsidies since 2023, but in fact it will be a temporary mechanism until the tax deduction rules come into force. It will make it possible to fix the state's obligations under the long-term subsidy during the transition period. 
"In general, the IPPA tool should help restart the investment cycle and achieve our forecast investment indicators," Maxim Reshetnikov said.

During development, the project was discussed with representatives of the business community, including representatives of the Russian Union of Industrialists and Entrepreneurs and the public organization Delovaya Rossiya. Particular attention was paid to the formation of an optimal algorithm for obtaining compensation, which ensures, on the one hand, prompt decision - making on the provision of support, and on the other hand it prevents compensation for excessive costs or investments in the creation of redundant infrastructure.

It is worth noting that the Federal law "On protection and promotion of investment in the Russian Federation" adopted in spring provides for reimbursement of investor expenses on infrastructure at the expense of taxes paid to the Federal and regional budgets.

For reference: according to the Federal law "On protection and promotion of capital investments in the Russian Federation", an investor can be reimbursed up to 50% of the actual costs incurred for supporting infrastructure objects (required exclusively for the investment project) within 5 years, and up to 100% of the costs for related infrastructure objects (necessary not only for the project, but also for other consumers, including the population of nearby territories) within 10 years.