Moscow Government to grant tax relief to four industrial companies

Moscow Government to grant tax relief to four industrial companies
The benefits will save the four companies more than 93.6 million roubles worth of tax payments per year. The money will be invested in expanding and modernising production.

A number of Moscow companies will be granted an industrial complex status and tax incentives, Moscow Mayor Sergei Sobyanin said during a visit to the Lianozovo Electromechanical Plant Research and Production Corporation on Dmitrovskoye Motorway.

“This company has been making good progress despite what we have termed an economic crisis. I have taken a look and, indeed, both its profits and exports have been on the rise, especially over the past few years. This shows that the company is expanding its markets and growing, although, of course, there are certain difficulties. To minimise problems, the Moscow government will use a whole set of incentives to encourage successful industrial complexes that offer decent salaries and invest in production,” Mr Sobyanin said. 

A decision will be adopted as early as today, making it possible to grant tax breaks to a number of companies, the Lianozovo plant among them, he added. “We will reduce the profit tax from 18 percent to 13 percent and will make significant cuts in property and land taxes. These are considerable tax incentives. And of course, we expect the company to make further progress, develop and pay good salaries.”

The transport infrastructure in the area is also being improved. On 15 September, five additional commuter trains will be launched on the Savyolovskaya railway, shortening the waiting time to under six minutes.

“We are improving infrastructure in the entire district, which, I believe, creates logistical advantages for the plant itself, including an opportunity for thousands of people to travel to the industrial area where they work. We will reconstruct the Dmitrovskoye Motorway up to the town of Severny,” Sergei Sobyanin said.

Also, a number of stations along the Savyolovskaya line will be integrated into the Smaller Moscow Belt Railway (SMBR), which will become in effect a surface metro network.

“Parallel construction is under way of the Northwestern and Northeastern expressways, which will merge at a point between the Altufyevskoye and Dmitrovskoye motorways. Therefore, people will be able to travel to this district both from the east and west,” the Mayor said.

The Moscow Government’s Presidium will meet to approve an industrial complex status for the following companies: the Dymov Sausage Works, the Cherkizovsky Meat-Processing Plant, the Tsaritsyno Meat-Processing Plant and the Lianozovo Electromechanical Plant.

Together, they employ over 10,100 people. The tax incentives will save the four companies more than 93.6 million roubles per year, which will be invested in expanding and modernising production.      

Moscow industrial complexes

Thus, Moscow will have12 industrial complexes employing 23,200 people. These companies have invested 13 billion roubles in their production over five years and will now enjoy tax incentives.  

The industrial complexes have been granted tax relief of up to 19 percent on regional taxes. 

 

 

Current rate

Reduced rate for industrial complexes

Profit tax to the city budget

18 percent

13.5 percent

Property tax

2.2 percent of balance value

50 percent of property tax

Land tax

1.5 percent of cadastral value

20 percent of the assessed tax amount  (0.3 percent)

Land rent

Up to 1.5 percent of cadastral value

0.3 percent of cadastral value

Industrial complexes must meet the requirements stipulated by law and assume the following commitments:

  • to rationally use their land plots (the built-over areas must be not less than 4,000 square metres per hectare;
  • to use buildings and land plots for the intended purpose: for innovative activity and industrial production; non-core facilities (trade, offices, food service, community services) must not exceed 20 percent of the overall production floor space;
  • to invest in production development (no less than 100 million roubles per each hectare of the occupied territory over five years);
  • to ensure economically efficient production with a certain amount of revenues (no less than 300 million roubles) and a certain salary fund (no less than 100 million roubles) per each hectare of the occupied land plot;
  • to pay decent salaries: no less than the monthly average for Moscow (no less than 51,070 roubles per employee).

For companies engaged in socially important sectors (food, construction and textile industries), decreasing coefficients have been envisaged.

The industrial complex status and the tax incentives that come with it serve the following tasks:

  • to provide significant support to companies playing an important part in the city’s economy;
  • to maintain and increase employment and production levels;
  • to promote the rational use of the land plots occupied by companies;
  • to ensure decent salaries to employees;
  • to encourage investment in production development.

Lianozovo Electromechanical Plant

The Lianozovo Electromechanical Plant (LEMP) is Russia’s largest manufacturer of electronics. It was founded in 1935 for railway passenger car production and maintenance. In 1951, the plant was reoriented to produce sophisticated radio-electronic equipment.

The LEMP contributed to a number of important national programmes. Its specialists installed radar equipment on the Strela automated air-traffic control systems in Russia (Rostov area), in Ukraine (Kiev area) and Belarus (Minsk area) and participated in the creation of the landing module for the Soviet-era Buran reusable spacecraft and the S-300 air defence missile complex.

In 2002, the LEMP became part of the Almaz-Antey Concern.   

Today the plant is one of Moscow’s largest job providers: it employs more than 6,000 people, whose average monthly salary is 54,900 roubles.

The plant occupies 47.58 hectares of land and owns 246,300 square metres of real estate.

The LEMP produces radar systems, including means of airfield and flight route surveillance, automated air-traffic control systems, meteorological radars, military equipment and other products.

The company has the resources to produce electronic, electrical and mechanical components for sophisticated systems: steel-making and press forging facilities; metalworking shops; an electroplating shop room; circuit board production; large-size antenna production; assembly rooms and up-to-date testing equipment.

Its certified product quality control system meets the ISO 9001-2000 international standards.

The plant distributes its products from Moscow to all Russian regions, using its own railway.

The LEMP exports its products to around 50 countries in Europe, Asia, Africa and Latin America. This year, the share of exports in the plant’s book of orders may increase to 20 percent, up by 4 billion roubles from last year.

The plant’s short-term development strategy includes investment in the following fields:

-   research and technology, innovative development;

-   marketing, the development of core activity;

-   modernisation of the production and technological base;

-   expansion of resources;

-   advancement of the management system.

The plant participates in the following state programmes: the State Armament Programme until 2025; the Federal Programme for the Improvement of the Federal System of Reconnaissance Service and Airspace Control; the Federal Programme for the Development of the Defence Complex, 2011-2020; the Federal Programme for the Development of the Electronic Components Base and Radio Electronics, 2008-2015.