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Russian government approved a bill on zeroing VAT for air carriers in the Far Eastern Federal District - EastRussia | Far East

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The Russian government approved a bill on zeroing VAT for air carriers in the Far Eastern Federal District

Amendment in Art. 164 of the Tax Code, zeroing VAT for air carriers on routes to the regions of the Far East, was discussed at a meeting of the government of the Russian Federation, the press service of the Ministry of Regional Development said. The legislative initiative aimed at reducing prices in regional air transportations last week was approved by the draft commission on draft law.

"We zero the VAT rate for domestic air transportation of passengers and baggage on the territory of the Far Eastern Federal District. At present, 10% rate is in force in this direction. But for obvious reasons, aviation in the Far East is often the only mode of transport. Therefore, it is so important that the transport infrastructure develops here, so that flights between the Far Eastern cities are uninterrupted, and the prices for regional flights are accessible to those who live there, "the head of the Cabinet of Ministers Dmitry Medvedev said in the message. The bill is reportedly offering a zero VAT rate for organizations that provide services for domestic air transport of passengers and baggage, provided that the point of departure and / or destination is located in the Far Eastern Federal District. As expected, the measure will increase the profitability of flights, reduce the price of tickets and increase passenger traffic by 2-3% per year.

The initiative to abolish VAT for Far Eastern flights belongs to Minvostokrazvitiya.