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Subsidies for business in Kaliningrad after the abolition of customs privileges will remain until 2031

06 / 09 / 21

Subsidies from the federal budget to support the labor market in the Kaliningrad region in connection with the abolition of a number of customs benefits for local producers after April 1, 2016 will remain until 2031 inclusive. Governor of the region Anton Alikhanov announced this at a meeting with representatives of German business.

“The volume of these subsidies, which we are talking about, will be fixed at 85% of the costs that you [business] bear when paying customs duties and other payments related to our position [isolation from the main territory of the Russian Federation]. this level of compensation will be fixed and will be constant until 2031 inclusive, that is, we have another 10 years of guaranteed subsidies from the federal center, "Alikhanov said.

From April 1, 2016, enterprises operating in the Kaliningrad region, when exporting processed products from the region using foreign components to the territory of the countries of the Eurasian Economic Union, must pay customs duties. To support the labor market from the federal budget, since 2016, the region has been annually allocated a subsidy to compensate manufacturers' costs incurred after the cancellation of some of the customs benefits, salary payments, social and health insurance contributions to the Pension Fund of the Russian Federation. In 2016, the region was allocated more than 66 billion rubles from the federal budget for these purposes, 140 enterprises applied for support, the total amount of payments amounted to about 26 billion rubles.

It was assumed that from 2020 there will be an annual 5% decrease in the total volume of subsidies to the region. As Alikhanov noted, amendments have been made to the decree of the government of the Russian Federation regulating this mechanism, excluding these reductions for the next 10 years. "It (the decree of the government of the Russian Federation - note TASS) was recently amended, and we were able to exclude from it a gradual reduction [of subsidies] to zero over the next 10 years. This reduction will not happen," he said.


Alikhanov answered questions from representatives of German business and presented the potential and conditions for business development in the region. He noted the interest of international companies in the opportunities of the special administrative region (SAR) on Oktyabrsky Island, where about 40 residents are registered, and spoke about the benefits for residents of the special economic zone in the Kaliningrad region. In particular, they are provided with reduced contributions to the pension and medical funds at the level of 7.6%. According to him, in the near future a decision is expected to extend this benefit for SEZ residents for 10 years from the date of registration of a legal entity, a resident of the SEZ. "The draft law [regulating this issue] is already in the government of the Russian Federation, we hope that in the near future it will be sent to the State Duma for consideration," the governor said.

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Recall that in 2016, customs benefits were replaced by compensation for their payment to the federal budget in the amount of 100% of the amounts additionally paid to the budget. The federal budget suffered from such a mechanism for supporting business and the member countries of the EAEU customs union benefited, since out of 100% of duties paid by companies, only about 85% came to the Russian budget. Kaliningrad companies had to pay extra from the treasury to the federal government.

Earlier it was planned that from 2020 an annual 5% reduction in the amount of compensation will begin, but in 2021 it was decided to fix it at 85%. That is, the duties paid by businesses also go to the budgets of Belarus and Kazakhstan, but Russia, when compensated, should not pay the difference up to 100%.

Based on materials: https://tass.ru/ekonomika/10657229
https://www.newkaliningrad.ru/news/briefs/economy/23950035-vlasti-sokhranenie-kompensatsiy-rezidentam-oez-eto-novyy-perekhodnyy-period.html

06 / 09 / 21Subsidies for business in Kaliningrad after the abolition of customs privileges will remain until 2031

Previously, it was assumed that from 2020 there will be an annual 5% decrease in the total volume of subsidies to the region.

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