The State Duma will limit the Urals oil discount to Brent at $34 when calculating the severance tax

A bill specifying the average price of Russian Urals oil when calculating the mineral extraction tax (MET) and additional income has been submitted by the Russian government to the State Duma, a correspondent reports. IA REGNUM.

Russian oil

Russian oil

Ivan Shilov © IA REGNUM

The initiative was developed to provide financing for the construction of additional commodity distribution infrastructure for the transportation of liquid hydrocarbons produced on the territory of the Yamal Peninsula (Bovanenkovskoye and Kharasaveyskoye gas and oil condensate fields), according to the accompanying documents to the bill.

Amendments to the Tax Code provide for the provision of a “tax credit” through the application in tax periods beginning from April 1, 2023 to March 31, 2029 inclusive of a tax deduction for MET in the amount of 1.1 billion rubles for the acquisition, construction, manufacturing, delivery of fixed assets related to road, transport, engineering, energy infrastructure facilities necessary for the implementation of the relevant project.

It also establishes a mechanism for the return of a tax deduction to the budget system of the Russian Federation in the period from April 1, 2029 to March 31, 2035, inclusive, in an amount equal to the sum of the amount of the tax deduction received from the MET and the indexation amount in the amount of 9% per annum.

In addition, there are restrictions on the application of a tax deduction if the Urals oil price level in the tax period turns out to be less than or equal to the base oil price level determined or if the Urals oil price level in the tax period turns out to be higher than the base price , increased by 27.55 US dollars per barrel.

At the same time, it is planned to clarify the value of the average price level for Urals oil in the world markets for calculating the MET for oil production, the tax on additional income from the extraction of hydrocarbon raw materials and the excise tax on petroleum feedstock, as well as to clarify the average price of the export alternative for motor gasoline class 5 and diesel fuel class 5, in order to calculate the damping component of the tax deduction of excise amounts on petroleum raw materials.

It is assumed that the implementation of the law will not require additional costs covered by the federal budget, since the tax deduction is provided on a refundable and urgent basis, including indexation at a rate of 9% per annum, follows from the financial and economic justification for the bill.

The Deputy Minister of Finance will present the bill to the State Duma Alexey Sazanov.

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