The State Duma adopted in the first reading a package of bills that amends the system of levying additional income tax (APT) introduced in Russia from January 1, 2019, which is used mainly in the oil industry. The Ministry of Finance expects from the oil industry 237 billion rubles of additional receipts per year.
Amendments to the Tax Code of the Russian Federation (N 1023276-7) and the Customs Tariff (N1023275-7) were submitted to the State Duma by the government at the end of last week.
Amendments to the Customs Tariff effective January 1, 2021 remove the opportunity for companies to set a reduced export duty on oil from new fields with special physical and technical characteristics. The exemption has been applied since 2013 and applies to 15 fields, the largest of which belong to LUKOIL, Irkutsk Oil Company (INK), Rosneft, Gazprom Neft (MCX: SIBN), Surgutneftegaz. At the same time, the bill abolishes the export duty exemption for high-viscosity and extra-viscous oil. One of the largest users of the privilege is Tatneft (MCX: TATN), as well as LUKOIL (MCX: LKOH) and Rosneft (MCX: ROSN), according to the companies' reports.
The severance tax benefits for the extraction of super-viscous oil, benefits for companies that, at their own expense, search for and explore the fields they develop are being removed. In addition, the bill removes from the NK one of the coefficients (Kv) – the depletion of reserves of a particular subsoil area, taken into account when calculating the reduced MET rate. In return, companies that have enjoyed all of the benefits listed above are offered to switch to the AIT regime. To this end, the bill revises the parameters of the tax itself.
The list of plots that can be applied by AIT is expanding – it includes subsoil plots located in the North Caucasus Federal District (NCFD), Sakhalin, Orenburg and Samara regions. The coefficient (Kg) is being specified, which is included in the formula for calculating the tax rate for a number of groups of fields and characterizes the period of time that has passed since the date of the start of commercial oil production in the subsoil area – the less time has passed since the beginning of development, the lower the coefficient.
The Kg coefficient now for fields of the first and second groups ranges from 0.4 to 1 (the beginning of the development of fields from five to seven years); for the third group – 1; for the fourth group 0.5 – the first year, then 0.75 during the year and 1 in the third year. For the fifth group from 0.2 to – 1 in the period up to 15 years. The adopted bill extends by 4 years, up to 19 years, the terms of using reduction factors for deposits in the Arctic (fifth group). The document also sets the coefficient at level 1 for the second and third groups, while an exception is set for the second group.
Thus, for oil produced in subsoil areas located simultaneously within the boundaries of the Nefteyugansk, Surgut and Khanty-Mansi regions of the Khanty-Mansiysk Autonomous Okrug – Yugra, for the period from January 1, 2021 to December 31, 2023, the coefficient will increase to 1.2 … For oil produced in the areas of the second group, which are located within the boundaries of the Yamal region of the Yamalo-Nenets Autonomous Okrug, for the period from January 1, 2021 to December 31, 2023, it will be 1.95.
According to analysts, the Novoportovskoye field of Gazprom (MCX: GAZP) Neft falls under the coefficient of 1.95, which puts the company in the most disadvantageous position among others, for which the coefficient will be 1.2.
The procedure for transferring historical losses is being revised. Now it was possible to transfer 100%, the bill proposes no more than 50% for the period 2021-2023.
Amendments to the bill are adopted by the relevant State Duma committee by the end of the week.