FSUOGM: Rosneft subsidiaries may be hit by windfall tax

Russia’s largest oil producer Rosneft is trying to exempt its non-core subsidiaries from the obligation to pay the so-called “windfall tax,” Kommersant has reported, citing internal government memos.

Earlier this month, the Russian Ministry of Justice and the cabinet approved a draft law proposed by the Ministry of Finance that laid a foundation for the windfall tax. The law, entitled “On tax on excess profits of previous years,” purported to make provisions for a one-time “voluntary” payment of taxes on the real sector worth a total of RUB300bn ($4bn).

Oil and gas companies, along with the agricultural sector and small and medium-sized enterprises (SMEs), are supposed to be exempt from the tax. However, Rosneft is reportedly seeking exemptions for its petrochemical and IT subsidiaries.

Meanwhile, the special State Duma Energy Committee has reportedly proposed exempting non-core subsidiaries of oil companies with state participation from the “windfall tax” on the grounds that these entities already “ensure payment of income to the budget in the form of dividends.”