07:00 GMT06 July 2020
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    MOSCOW (Sputnik) - Russia is mulling over the idea of providing incentives for companies that are drilling for oil and gas off its Arctic coast, which will include a 5 per cent severance tax break over 15 years, Deputy Prime Minister Yury Trutnev said on Thursday.

    "It is 5 per cent over 15 years, starting after 1 per cent of the field’s resources have been extracted," he explained to reporters.

    On top of that, the authorities will have the right to cut the regional corporate taxes to zero, while exploration expenses might be deducted from the federal corporate tax.

    "We have not made the final decision on the last one. The Finance Ministry does not mind in principle, but they asked to make sure that the tax deductions did not equate to all taxes," he added.

    Russia's third-largest oil producer, Gazprom Neft, has confirmed that it has five offshore Arctic projects that could be eligible for the incentives, provided that they were launched, the minister noted. The company is running a petrochemical complex in the Arctic worth $17 billion.

    tax breaks, arctic drilling, Arctic, Russia
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