Gov't Makes Final Decision On VAT Taxation Of Oil Projects

Today the government commission on product-sharing agreements finally resolved the question of VAT taxation with regard to Sakhalin-1 and Sakhalin -2 oil projects and the development of the Kharyaga oilfield. Russian Deputy Prime Minister Victor Khristenko told journalists that VAT refunds to be made from the federal budget until the end of this year would amount to about $46m. "In doing so, we are shifting to a normal mechanism of VAT reimbursement. Before that this tax was not collected form contractors," he said.