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March 12, 2021

Tax incentives for large investors in Ukraine

1. Import VAT and import duty
2. Corporate income tax
3. Other taxes

 

On 2 March 2021, the Verkhovna Rada of Ukraine adopted Laws On Tax and Customs Incentives for Investors Implementing Investment Projects with Significant Investments.

Import VAT and import duty

From 1 January 2021 to 1 January 2035 the exemption from value added tax is envisaged for importation transactions into the customs territory of Ukraine under the import customs regime of equipment for the implementation of an investment project with significant investments under a special investment contract.

Note that the equipment must be new and manufactured not earlier than 3 years before the registration date of an investment project with significant investment, and its list and volume will be defined by the Government of Ukraine together with a conclusion of a special investment contract.

It also provides for import duties relief on equipment imported by an investor during the implementation of an investment project.

The list and volumes of goods to be exempt from customs duties will be approved by the Cabinet of Ministers of Ukraine simultaneously with a conclusion of a special investment contract.

Corporate income tax

Also, an investor with significant investments, who is a party to a special investment contract, is exempt from corporate income tax. Exemption from corporate income tax will be applied after the commissioning of an investment project object for five years within the term of a special investment contract.

A prerequisite for income tax exemption is the obligations fulfillment by an investor with significant investments under a special investment contract.

Other taxes

Besides, it is envisaged that local governments will be able to reduce land tax and land rent rates for large investors, or exempt them from paying such taxes altogether.

As a reminder, on 13 February 2021, the Law of Ukraine On State support of investment projects with significant investments came into force.

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