Moscow will Support Industrial Companies with a New Benefit

Starting from 2023, due to the federal legislation changes, the regional preferential income tax rates will expire. That is why the Moscow Government introduced a new support measure for industrial companies, which is an investment tax deduction.
It will be granted to the companies that are located in Moscow and have the Moscow investor status.

The benefit provides for a reduction of income tax payable to the budget of a Russian constituent entity. Since the tax includes a regional part, up to 90% of investments in fixed assets can be written off. The unused regional benefit amount can be transferred to future periods (up to seven years). The tax amount payable to the federal budget can also be reduced down to zero, but within a year.

The Moscow investor status is assigned for a period of up to seven years and shall be confirmed five years after the status assignment date.

The minimum annual amount of fixed assets expenses is RUR 200 m (excluding VAT) for the enterprises assigned with the first category Moscow investor status, and RUR 300 m (excluding VAT) for the enterprises assigned with the second category Moscow investor status.
Due to the tax regional part, it is possible to write off up to 90% of investments in fixed assets,
and the unused amount of regional benefits can be transferred to future periods
(up to seven years)
Aleksandr Prokhorov
Head of the Moscow Department of Investment
and Industrial Policy:
"The support using the new mechanism will be provided to actively investing industrial enterprises. The main condition for obtaining an investment tax deduction is the fulfillment of formal requirements: the applicant shall carry out its activities in Moscow, not be subject to a liquidation / bankruptcy procedure, as well as comply with a number of economic requirements."
An enterprise that has confirmed the first category Moscow investor status may get a preferential rate for the regional income tax equal to 12.5%; 8% for the second category.

Until January 1, 2023, industrial complexes and technoparks can choose one of the preferences: a profit benefit according to its status (now it is 12.5%) or an investment tax deduction. At the same time, they still have property and land privileges, that means, an enterprise can have two statuses (an industrial complex and a Moscow investor) and decide which income privilege is more profitable for it to use.

An investment tax deduction could be an alternative to federal special investment contracts. Thus, when the Moscow Government introduces an alternative support option, i. e. an investment tax deduction for income tax, it will help create the conditions for implementing the priority areas of the Moscow industrial development, the development and implementation of innovative technologies, the fixed assets renewal and investment activity increase.


To get the Moscow investor status
The company shall:
  • be registered as a taxpayer in Moscow:
  • not have arrears in taxes, fees and land rent;
  • not be undergoing liquidation / bankruptcy procedure;
  • have ownership or other rights for the premises / building where the fixed assets are installed.

Economic requirements for the company:
  • the revenue from manufacturing shall make at least 70%;
  • the fixed assets renewal coefficient (excluding buildings and structures) shall be at least 8% for the last year or at least 35% for the five years preceding the status assignment; at the same time, the applicant shall achieve a fixed capital renewal rate of at least 35% five years after the status assignment date;
  • the average monthly salary of employees shall not be lower than the average monthly salary in Moscow (according to Rosstat, RUR 68,000 (in the Troitsky and Novomoskovsky Administrative Districts, a coefficient of 0.74 – RUR 50,000 – is applied).
Audience: 16+