MOSCOW, April 22 (RAPSI) - President Vladimir Putin signed a directive Tuesday that would exempt roundtrip passenger flights to the Crimean Federal District from VAT (value-added tax) starting June 1, 2014, the Kremlin Press Service reports.

The Government received a similar proposal from the Ministry of Transport. Currently, all domestic flights in Russia are subject to an 18% VAT, which increases fares significantly compared to international flights without VAT. Until recently, roundtrip flights to Crimea were also exempt from VAT. However, since the accession of Crimea, they are now subject to VAT under Russian law.

The current law must remain in effect until May 20, at which point the Government will adjust the regulatory base to zero VAT on Crimean flights.

Also, until May 1, the Government will develop regulations to provide subsidies to airlines to make passenger operations to Simferopol more affordable, with the exception of flights to/from Moscow and St. Petersburg that already benefit from subsidies.