On 23 November 2017, the Government approved a plan to introduce a profit-based tax on the oil industry, expected to come into force on January 1, 2019, later than previously thought.
Currently, the tax regime for the oil industry stipulates that oil companies pay the so-called mineral extraction tax (MET), which is calculated on the basis of the volumes of oil and gas extracted. The oil extraction tax is adjusted to reflect the fluctuations in global oil prices and the depletion and volume of oil reserves.
The new tax regime is expected to be approved by Russia’s Parliament in the first quarter of 2018 and enter into force on 1 January 2019 although the rate has not yet been specified.
Reports have suggested that the new tax, if approved, will initially be introduced in several key areas, including oilfields that currently face lower export duties, depleted fields in Western Siberia, and new deposits in Eastern Siberia.
