The President signed the Federal Law “About making changes in Section 21 of the Part 2 of the Tax Code of Russian Federation and suspending the paragraph 3 item 2 sub-item 7 of the section 149 of the Part 2 of the Tax Code of Russian Federation (related to transportation of passengers by railways in commuter rail segment)”. In the network of this law the VAT rate for domestic flights was reduced from 18% to 10%, press-service of the President of Russia reports.

The federal law assumes reducing the VAT rate to 0% for passenger transportation by railway (commuter rail) for the period until December 31^st 2016, as well as suspending the paragraph 3 item 2 sub-item 7 of the section 149 of the Part 2 of the Tax Code of Russian Federation (which assumes removing the VAT for the abovementioned services for the period until January 1^st 2017).

The changes also include reducing VAT rate for domestic flights from 18% to 10%; the press-service believes that this decision will cause decrease of the federal budget income, but, on the other hand, it will help stabilize the financial situation of air carriers and may decrease the cost of transportation.

«The federal law also assumes reducing VAT rate to 10% (until December 31^st 2017) for operations connected with performing domestic flights provided that departure or destination point is located in the territory of Republic of Crimea or Sevastopol - the city of federal importance,» said in the statement.