On November 4, the Verkhovna Rada of Ukraine adopted in the first reading draft laws that provide for compensation of capital investments through tax mechanisms. This was reported by the press service of the parliament.
These are amendments to the Customs and Tax Codes of Ukraine (draft laws No. 13414 and No. 13415), which were supported by 245 people’s deputies. These bills introduce a model of investment compensation through taxes, which should encourage businesses to abandon the raw material development model and invest in the processing industry.
The initiative provides for preferential tax conditions for a period of ten years — from 2026 to 2035 — for investors who implement projects for the construction, modernization or technical re-equipment of enterprises, as well as for the purchase of equipment or land for production.
“Ukrainian industrialists have become one step closer to a very effective investment incentive tool that their colleagues in the European Union have long been using”, – noted Dmytro Kysylevsky, co-author of the draft laws and deputy chairman of the Rada’s economic committee.
According to him, the key feature of this initiative is that it will apply not only to new, but also to existing enterprises that make investments.
The size of tax and customs benefits will depend on the volume of investment: from 100 thousand to 1 million euros – up to 70% of the investment; from 1 to 20 million euros – up to 50%; from 20 to 50 million euros – up to 30%. The package of benefits includes exemption from income tax (provided that at least 90% of the company’s income is generated from the sale of its own processed products), exemption from VAT and customs duties on new equipment, as well as the possibility of receiving land benefits from local authorities.
