The State Duma adopted a bill amending Article 427 of Part Two of the Tax Code of the Russian Federation in order to improve the mechanism for applying reduced insurance premium rates to residents of the priority development area (PDA) and the Free Port of Vladivostok (FPV) who received the relevant status before January 1, 2023. The draft was prepared by the Government of the Russian Federation in pursuance of the President's instructions.
According to Article 427 of the Tax Code, organizations and individual entrepreneurs who have received the status of a resident of a priority development area or the status of a resident of the Free Port of Vladivostok apply reduced rates of insurance contributions for ten years.
The practice of implementing investment projects shows that within 3-5 years after receiving the status of residents, the investment stage of projects is carried out by contractors and does not require the involvement of hired workers. Therefore, the actual period of application of reduced rates of insurance premiums in relation to payments to hired workers for residents of priority development areas and the Free Port of Vladivostok is significantly less than 10 years (in fact, about 5-7 years).
Since January 1, 2023, for “new” residents, a declarative procedure for applying reduced insurance premium rates has been in effect, which allows “pushing back” the start of the period of applying reduced insurance premium rates for up to 3 years – that is, postponing the start of using the benefit from the investment stage of projects to a later period, when residents have created the maximum number of new jobs. However, for residents who received the status before January 1, 2023, reduced insurance premium rates are applied automatically for 10 years from the date of receiving such status.
The adopted Federal Law eliminates the said inequality and gives residents of priority development areas and free port areas who received the status before January 1, 2023, the opportunity to postpone the period of application of reduced insurance premium rates for up to 3 years.