President of Russia Vladimir Putin said during a plenary session of the Eastern Economic Forum in Vladivostok that Russian and foreign entrepreneurs starting businesses on the Kuril Islands will be entitled to a preferential tax regime.
According to the President, businesses can be completely exempted from most taxes for a period of 10 years from the moment they begin operation in the new tax-free zone. Vladimir Putin specifically mentioned exemption from the transport and land taxes, as well as property and profit taxes.
Furthermore, according to the President, the Kuril Islands will also become a free customs zone. This means it will be easier to import commodities and equipment and export finished products to Russian and foreign markets.
In addition, because the islands will be a free customs zone, no VAT will be levied within this zone before goods leave the Kurils.
However, the President made a reservation saying that not all types of activities will enjoy these preferential tax incentives.
“They will not apply to intermediaries, the production of excisable goods, the extraction and processing of hydrocarbons or harvesting precious water bio-resources,” he said.