The Verkhovna Rada, Ukraine’s parliament, has passed bill No. 3761 to amend Section XX “Transitional Provisions” of the Tax Code of Ukraine as regards specifics of taxation of business entities implementing investment projects involving significant funds.
Some 246 lawmakers backed the draft law in the second reading and as a whole with the required minimum being 226 votes.
Head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy Danylo Getmantsev says the draft law does not provide for full tax exemption.
“This isn’t about a fifteen-year benefit, but about those that can be provided within a fifteen-year term of a particular project implementation. At the same time, it’s no more than five years for corporate profit tax, and as regards total benefits – it’s up to 30% of the investment amount. This is the logic of the bill,” he said.
The draft law is a supplement to the previously passed legislation on the so-called “investment nannies”.
As the explanatory memo says the bill proposes VAT exemption for transactions carried out from January 1, 2021 to January 1, 2035 (but not exceeding the period and volume of state support specified in a special investment agreement), involving imports by an investor of equipment to implement a large-scale investment project.
The bill also suggests relieving of corporate profit tax any large-scale investor’s company that is party to a special investment agreement concluded in line with the law of Ukraine on state support of investment projects with significant investments. Such companies are exempted from corporate profit tax for a period of five years after an investment project has been commissioned, within the validity period of a special investment agreement.
A prerequisite for exemption from corporate profit tax is the fulfillment by such an investor of his liabilities under said agreements. (UNIAN/Business World Magazine)