MOSCOW: Russia’s Energy Ministry has announced that changes to the tax treatment of the oil industry will take place, but potentially not until 2019.
Currently, the industry is taxed on exports and through a mineral extraction tax, imposed on the amounts of oil and gas extracted, which is adjusted according to global oil prices and levels of oil reserves.
Legislation presented on November 27 would impose a tax based on the profits of oil and gas firms, although the rate has not yet been specified.
Reports have suggested that the new tax, if approved, will initially be introduced in several key areas, including oilfields that currently face lower export duties, depleted fields in Western Siberia, and new deposits in Eastern Siberia.
Federal Law No. 335-FZ Concerning the Introduction of Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation is expected to be approved by the lower house of Parliament in early 2018, with approval from the upper house and signature by President Putin then required for it to be enacted.
