B) Read this article about the system of taxation in free economic zones

 Some sentences are missing. Discuss with a partner what sentences you would expect to find in each gap.

Special economic zones provide special conditions of doing business for the residents which is guaranteed by the Government of the Russian Federation:

1. ____________________ (1):

Income tax: for the SEZ residents tax rate is 0-13.5% instead of 20%;

The residents of technology and innovation and tourist and recreational special economic zones which are combined into cluster are exempt from income tax;

Property and transport tax exemption for 10-15 years;

At the federal level investors are exempt from land tax for 5-10 years.

2. Investors receive modern transport, social, customs and other infrastructure for business development created at the expense of state budget;

3. Special custom regime – is a regime of free customs area which means that investors in the special economic zones’ territory don’t have to pay customs duty and value-added tax for foreign goods. ________________________ (2);

4. Reduced administrative barriers (_______________ (3). “Single window” means that investors give all documents to one special agency and this agency assists in agreement procedures that reduce the time on initial stage of the investment project.

5. Access to the qualified personnel resources.

6. There is simplified migration regime for highly qualified foreign staff, involved in the special economic zone.

The process of obtaining the status of a SEZ resident is legally transparent and easy for an investor and consists of 4 major steps.

1 – company registration and business-plan making;

2 – handing in an application to the Ministry of economic development of the Russian Federation;

3 – application acceptance by the Expert committee;

4 – signing triangular agreement between an investor, Ministry of Economic Development and SEZ management company.

__________________________ (4).

Now we are attracting professional management companies for operating in special economic zones in order to improve their efficiency. These companies have different guarantees from the Government and they are free of real estate tax for 10 years.

____________________ (5). An agreement to manage a special economic zone "Monglino" in Pskov region was signed between the Singaporean company "Jurong" and the management company of JSC "SEZ" Moglino" in Singapore on December 20, 2012.

Russian SEZ have approved themselves successful in the international arena. SEZ "Alabuga " in the Republic of Tatarstan was included in the "Foreign Direct Investment" magazine global rating of "Free Economic Zones 2012/2013", and took 40th place (this rating takes into account more than 600 zones in 120 countries).

________________ (6).

 

B) Match these headlines (A-F) with the gaps in the article (1-6).

A       The system "single window" simplifies the interaction with regulatory authorities;

B       Any company or individual entrepreneur, legally registered in the boundaries of the special economic zone can become the resident of SEZ;

C       Thus, special economic zones have already shown its effectiveness, especially in terms of attracting foreign direct investment;

D       We have already had an experience in attracting foreign companies to manage special economic zones;

E       It is also forbidden to use prohibitions and restrictions of economic character;

F       Tax preferences.  

 

Exercise 6.

Fill in the following prepositions where necessary.

from       at by within    on of for to    

There are tax exemptions common _____ (1) all types of special economic zones:

1. A reduced rate of income tax to be paid ____ (2) the budget of the Russian Federation has been set for residents of all types of zones.

2. Residents are exempt ______ (3) property tax for a period of 5-10 years depending on their zone from the moment of their property registration if the following conditions are satisfied:

o Property is created or acquired to conduct activities ____ (4) the zone;

o Said property is located within the zone;

o Property is actually used within the zone.

3. Preferences relevant to transport tax are set ____ (5) the Russian Federation constituent entities, where special zones are created. Transport tax exemptions are granted to investors from the moment ___ (6) the registration of the vehicle.

4. ____ (7) the federal level, investors are exempt from land tax for 5-10 years depending ____ (8) their zone upon emergence of ownership right to land located on its territory.

 

Exercise 7. Word formation.