As part of the presidential program to increase the investment attractiveness of Ukraine on March 2nd, 2021, as the logical follow-up to the Law of Ukraine ‘On State Support for Investment Projects with Significant Investments’ (i.e. ‘On Investment Nannies’) The Verkhovna Rada of Ukraine has adopted competitive investment incentives.
According to the adopted draft law No. 3761 (‘On Amendments to Section XX ‘Transitional Provisions’ of the Tax Code of Ukraine on Peculiarities of Taxation of Business Entities Implementing Investment Projects with Significant Investments’), for the implementation of an investment project with significant investments investors are exempted from value added tax on the imported equipment and corporate income tax for five consecutive years.
In accordance with the amendments adopted by the draft law No. 3762 (‘On Amendments to Section XXI ‘Final and Transitional Provisions’ of the Customs Code of Ukraine’), investors with significant investments are also exempted from paying import duties on the imported equipment, provided that the equipment meets certain requirements.
In addition, in the context of these changes, local authorities are authorized to change (reduce) rates on land tax and on rental payment for state and communal land.
Dmytro Vidsota, Managing Partner of Robinson Patman Law Firm:
‘The adopted amendments to the Tax and Customs Code are the main leverages for the implementation of the presidential initiative to increase the investment attractiveness of Ukraine, and the Law ‘On Investment Nannies’ would have been unworkable if the aforementioned laws had not been passed.
The revitalization of the government's investment activities is a signal to the business community that the adoption of investment incentives for the development of industrial parks would be the next step. Investors who are ready to build and develop industrial parks in Ukraine are waiting for the cancellation/reduction of the tax and customs burden. Neighboring countries already have successful experience in stimulating the development of industrial parks, so the discussion on the growth of Ukraine's economy competitiveness would become possible only as a result of the necessary investment incentives adoption.’
We recall that the investment projects – that meet the following criteria – are subject to the adopted investment incentives, in particular:
The relevant changes will be valid until January 1st, 2035.
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