"Green" benefit.
How does Russia simulate care for the environment in buildings?

In 2012, Russia introduced property tax benefits for high energy efficiency class facilities - Article 381, paragraph 21 of the Russian Tax Code. At that time, this innovation went almost unnoticed, as the acceptability of the exemption for real estate objects was not obvious.

The first progress on this issue took place in 2016, when in a letter of the Ministry of Finance the controlling bodies explained that "in respect of non-residential buildings with high energy efficiency class, property tax is paid in accordance with the general procedure, i.e. the benefit cannot be applied to such buildings".

Less than a year has passed since the Federal Tax Service explained in its own letter that "within the meaning of the norm of paragraph 21 of Article 381 of the Tax Code, the corporate property tax exemption can be applied to newly introduced objects of movable and immovable property with a high class of energy efficiency with an energy passport". In fact, this disproved the explanations given in the letter of the Ministry of Finance.

Was there a tax exemption?
Taking into account the mutually exclusive explanations of different state structures, the application of the exemption became the subject of many court proceedings in 2017. The fact is that, by the letter of the law, the privilege can be applied only to objects for which energy efficiency classification standards have been developed. For non-residential buildings, such standards simply do not exist in Russia.

The paradox of the situation is that despite the obvious imperfection and fiscal bias of the established system, there were precedents when courts took the side of business and the owners of the objects managed to prove the validity of the benefit.

In January 2018 a new clarification on this issue was issued: the benefit exempting objects from property tax within three years from the date of their registration can be applied subject to the adoption of the relevant law at the level of the Russian region. That is, the responsibility for implementation is now shifted to local self-government bodies. Needless to say, no region in the country has adopted such a law, and the system of tax incentives for builders of environmentally friendly buildings has in fact turned out to be loud statements that are not true.

What are energy efficiency classes?
Energy efficiency classes are known to ordinary people as A and A+ designations on washing machines and refrigerators. In terms of law, an energy efficiency class is a declaration by a manufacturer that a product meets a standard set by the state. In this case, class A is used to designate the goods with the highest energy efficiency, and class G - to designate the goods with the least energy efficiency.

Thus, the list approved by Order No. 769 of the Ministry of Industry and Trade spells out the obligation of producers/importers to establish an energy efficiency class. In addition, there are additional energy efficiency classes A+ and A++ to designate the goods with the highest energy efficiency. Such classes are used when goods with energy efficiency significantly higher than that established for class A appear on the market. The asset tax benefit applies if the asset is classified in classes A, A+ and A++..

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