Auto firms welcome new zero payroll tax in Kaliningrad

A cluster of automotive companies in Kaliningrad, formerly East Prussia, have applauded a fresh zero payroll tax to encourage the creation of new jobs, saying it could act as a magnet for large employers looking to set up or expand in the region.

According to Just Auto, automotive manufacturers in the area include Kia, Hyundai and BMW, which all run assembly facilities, while the largest automotive manufacturer is contractor, Avtotor.

Head of the Kaliningrad Office in Moscow, Denis Saliy, said at a recent Russian Automotive Forum that its location as the western-most region of Russia made logistics very convenient for companies using components manufactured in Europe as Kaliningrad was the gateway to the European Union and the Eurasian Economic Union.

“Of course geography alone is not enough,” he continued. “As of 1 January 2018, new jobs created will be exempt from payroll tax. Normally that tax is 30% - that may be attractive for companies with a high headcount."

There are also plans to improve transport infrastructure by introducing three more train ferries from next year to connect Kaliningrad with Russia proper.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

A cluster of automotive companies in Kaliningrad, formerly East Prussia, have applauded a fresh zero payroll tax to encourage the creation of new jobs, saying it could act as a magnet for large employers looking to set up or expand in the region.

According to Just Auto, automotive manufacturers in the area include Kia, Hyundai and BMW, which all run assembly facilities, while the largest automotive manufacturer is contractor, Avtotor.

Head of the Kaliningrad Office in Moscow, Denis Saliy, said at a recent Russian Automotive Forum that its location as the western-most region of Russia made logistics very convenient for companies using components manufactured in Europe as Kaliningrad was the gateway to the European Union and the Eurasian Economic Union.

“Of course geography alone is not enough,” he continued. “As of 1 January 2018, new jobs created will be exempt from payroll tax. Normally that tax is 30% - that may be attractive for companies with a high headcount."

There are also plans to improve transport infrastructure by introducing three more train ferries from next year to connect Kaliningrad with Russia proper.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.