Two draft laws have been registered in the Verkhovna Rada — No. 13414 and No. 13415, which propose the introduction of a mechanism for partial compensation of investments in the processing industry through a reduction of tax liabilities for investors.
This is reported by Finway
What Expenses Are Eligible for Compensation
The compensation is expected to cover a range of expenses related to the development of enterprises. These include: the construction of engineering networks and facilities, the creation of related infrastructure, the purchase or construction of production buildings, their modernization, technical and technological upgrades, the acquisition of new equipment and components, as well as expenses for purchasing land plots for production needs.
Compensation Mechanism and Conditions
The draft laws stipulate that partial compensation for investments will be carried out through a reduction of the following taxes: corporate profit tax, import VAT on equipment, import duties, property tax, and land tax.
The amount of compensation will be determined based on the investment sum in the project:
- from €100,000 to €1 million — up to 70% of expenses;
- from €1 million to €20 million — up to 50%;
- from €20 million to €50 million — up to 30%.
It is worth noting that the initiative applies to both new enterprises and investments in the modernization of existing production facilities.
“Partial compensation of investments through taxes is a mechanism that has long been successfully implemented in the EU. Thanks to this tool, EU countries have attracted many Ukrainian industrial enterprises that relocated from combat zones. It is time to implement this incentive in Ukraine. This initiative is a continuation of the ‘Made in Ukraine’ policy aimed at making production, investment, and export profitable in Ukraine,” the authors of the draft law emphasize.