The Verkhovna Rada of Ukraine has approved in the first reading bills No. 13414 and No. 13415, which provide for the implementation of capital investment compensation for enterprises in the processing industry through tax incentive mechanisms.
This is reported by Finway
What Investments Are Compensated and How Does It Work
The new rules allow enterprises implementing investment projects in the processing sector to partially reimburse expenses through tax payments. The compensation will cover the following expenses:
- construction of engineering networks, structures, and infrastructure facilities;
- acquisition or construction, modernization, and re-equipping of buildings and structures;
- purchase of production equipment;
- acquisition of land plots.
Reimbursement will be carried out through profit tax, import VAT on equipment, import duties on equipment, property tax, and land tax. The amount of compensation will depend on the total investment project amount:
- 70% for projects ranging from €100,000 to €1 million;
- 50% for investments from €1 million to €20 million;
- 30% for projects ranging from €20 million to €50 million.
Cost of Benefits and Impact on the Budget
The benefits will apply to both new and existing enterprises that invest in the development of the processing industry. Estimates suggest that the total cost of tax incentives could range from 20 to 40 billion hryvnias.
“The introduction of tax and customs benefits for investors is aimed at stimulating future investments in the processing industry and does not create direct losses for the budget.”
Thus, the authorities expect that these legislative initiatives will contribute to the development of the industry and attract additional capital investments.