Goals of the SAR
- Formation of favorable financial and administrative conditions for the development of business
- Attraction of capital to the Russian Federation
- Deoffshorisation of the Russian economy
- Infrastructure development of the territory
In accordance with Federal Law No. 291-FZ “On special administrative regions in the territories of the Kaliningrad Region and Primorsky Krai”, dated 03.08.2018, the Russian Far East and Arctic Development Corporation is the management company of the SAR on Russky Island.
A foreign legal entity that is a commercial corporation and has decided to change its governing law can become an international company.
International holding companies are also international companies, but have a special legal status in order to receive tax privileges.
Dividends in favor of IC
Period of privilege
Determination of subsidiaries' shares tax value at the market level as of the date of redomiciliation in the SAR
With equity> 15% and tenure <1 year
Ban on tax audits in the RF for tax years prior to redomiciliation
If the payer is a foreign company, then NOT from offshore (in accordance with the list of the Ministry of Finance of the Russian Federation)
No VAT for importing ships in the Russian Federation (subject to registration in the Russian Open Register of Ships)
no time limitations
No transport and property tax on ships / aircraft to be paid (subject to registration in the Russian Open Register of Ships or State Register of Civil Aircraft)
no time limitations
0% social contributions for crew members of ships (subject to registration in the Russian Open Register of Ships)
until 2027 (inclusive)
No income from operating ships is taken into account in determining the tax base for corporate income tax (subject to registration in the Russian Open Register of Ships)
no time limitations
No tax is paid on IC property located outside the RF and used in geological survey, exploration and mining projects under production sharing, concession or license agreements
no time limitations
Dividends to foreign persons from the IC
Period of privilege
Exclusion of the following income (expenses) from the income tax base of IHCs:
no time limitations
Exemption of CFC profits at the IHC level as a controlling person
until 01.01.2029
Stabilization clause for corporate income and property tax and transport tax
no time limitations
Privileged rate
Standard rate
Conditions of application
Period of privilege
5%
20% (interest, royalty)
13% (dividends)
When receiving dividends, interest and royalties
as from 01.01.2023
until 01.01.2036
5%
15%
On payment of dividends by public IHCs to foreign persons
(for companies, which received the IHC status prior to 25.02.2022, reduced rates may be applied until 31.12.2025 without fulfilling requirements of Art. 284.10 of the RF Tax Code)
until 01.01.2029
10%
20% (interest, royalty)
13% (dividends)
When dividends, interest and royalties are paid
Additional conditions: the recipient company is an FPO and is not based in a country included in the "black list" of the RF Ministry of Finance
as from 01.01.2023
until 01.01.2036
0%
13%
Reduced 15% shareholding threshold for exemption of dividends received
(for companies, which received the IHC status prior to 25.02.2022, reduced rates may be applied until 31.12.2025 without fulfilling requirements of Art. 284.10 of the RF Tax Code)
no time limitations
20% for companies with 50%+ of real estate in the RF
20% for companies with 50%+ of real estate in the RF
Exemption of profit from selling subsidiaries
(for companies, which received the IHC status prior to 25.02.2022, reduced rates may be applied until 31.12.2025 without fulfilling requirements of Art. 284.10 of the RF Tax Code)
no time limitations
0% for companies without 50%+ of real estate in the RF and subject to one year of ownership (subject additional conditions)
0% for companies without 50%+ of real estate in the RF and subject to 5 years of ownership (subject to additional conditions)
Additional conditions: year of ownership ≥ 15% of capital; share of real estate in the RF in the subsidiary's assets ˂ 50%; the subsidiary is not based in a blacklisted country of the RF Ministry of Finance; the subsidiary was not contributed to the IHC capital and was transferred to the IHC as a result of reorganization within 1 year after redomiciliation)
Cannot become an IC:
Conditions for obtaining IHC status:
The controlling persons (more than 15%) of the re-domiciled foreign organization obtained such status before 2017 (does not apply to public companies and persons subject to sanctions)
When registering an international company within the period from March 1, 2022 to December 31, 2023, documents and information (excluding information about controlling persons of the international company) can be provided no later than 12 months from the day of registration.
An IC loses its IHC status:
if it is deprived of its IC status in accordance with Federal Law No. 290-FZ “On International Companies”
When registering an international company within the period from March 1, 2022 to December 31, 2023, documents and information (excluding information about controlling persons of the international company) can be provided no later than 12 months from the day of registration.
Conditions for not applying the participation interest criterion for controlling persons requesting the IHC status:
As of March 1, 2022, the company is a public company
Aggregate direct and (or) indirect participation interest of public companies is 100%
Controlling persons (at > 25% participation interest as of 01.03.2022) are on the sanctions lists as of 01.03.2022
Conditions for IHCs applying reduced income tax rates
IHC applies reduced corporate income tax rates if it meets the following conditions during the entire reporting corporate income tax period:
Should the IHC fail to meet at least one of the above conditions, the amount of tax not paid as a result of unlawfully applying reduced tax rates shall be payable to the budget including the payment of appropriate penalties.
Primary documents