According to the Press Office of President of Ukraine, the head of state has signed two laws regarding the tax impetus to attract investment ventures with considerable funding.
In particular, Mr Zelensky has launched Law №1293-ІХ on Amendments in Tax Code on Peculiarities of Taxation for Businesses Implementing Investment Projects Involving Significant Funds in Ukraine, having been initiated by himself.
As per this instrument, temporarily till 01 January 2035 the operations concerning import of equipment and components thereto into Ukraine in order to implement large investment projects shall be VAT exempted. The enterprises being parties to special investment agreements concluded in accordance with Law on State Support of Investment Projects Involving Significant Funds shall also enjoy exemption from the profit tax for the profits gained as a result of such agreements.
The exemption from income tax is provided after the commissioning of an investment project object for five years within the validity period of a special investment agreement. A prerequisite for the application of tax exemption is the fulfilment by an investor with significant investments of his/their obligations under the special investment agreement.
In addition, the law allows local governments, until January 1, 2035, to reduce the rates of land tax and rent for the state and communal land or exempt from payment of land tax for land plots used for the implementation of investment projects with significant investments.
The total amount of funds exempted from taxation is taken into account as a part of the total volume of state support for an investment project with significant investments provided for by the special investment agreement.
Also, the head of state signed Law No. 1294-IX, initiated by himself, “On Amending Clause 4 of Section XXI” Final and Transitional Provisions “of Customs Code on exemption from taxation of import duty on new equipment and components for it imported for the implementation of an investment project with significant investments in pursuance of a special investment agreement”.
According to this document, temporarily, until January 1, 2035, equipment that is imported into Ukraine for the implementation of investment projects in accordance with the Law “On State Support of Investment Projects with Significant Investments” is exempted from import duty taxation. Tax incentives are granted provided the imported goods were manufactured no earlier than three years before the date of their import into Ukraine, were not in use, and also do not originate from the occupant state, or the aggressor state, or from the occupied territory of Ukraine.
It is envisaged that the list and volumes of import of such goods are approved by the Cabinet of Ministers together with the conclusion of a special investment agreement.
As noted, the implementation of these two laws will help draw strategic investors to Ukraine, increase the country’s investment attractiveness, as well as increase the competitiveness of the Ukrainian economy through the introduction of state support for large investment projects, in particular by providing tax incentives.