The Verkhovna Rada approved in principle draft laws №13414 and №13415 on compensating capital investments through taxes. This was reported by co-author of the initiative and Deputy Head of the Verkhovna Rada Committee on Economic Development, Dmytro Kysylevskyi.
“Ukrainian industrialists have taken one step closer to a highly effective investment stimulation tool already used by their colleagues in the European Union. It allows returning 30% to 70% of funds invested in constructing new or expanding existing factories and creating industrial infrastructure through taxes. The Ukrainian economy, weakened by war, needs new impulses,” the MP emphasized.
Investment projects eligible for tax compensation must be implemented in the processing industry.
Eligible expenses include:
- Construction of engineering networks, structures, and related infrastructure;
- Acquisition or construction, modernization, technical and/or technological re-equipment of buildings and structures;
- Purchase of production equipment;
- Purchase of land plots.
Partial compensation of investment project costs in the processing industry will be applied through the following taxes:
- Profit tax;
- Import VAT on equipment;
- Import duty on equipment;
- Property tax;
- Land tax.
The portion of investments eligible for tax compensation depends on the size of the investment project:
- €100,000 – €1 million: 70%
- €1 million – €20 million: 50%
- €20 million – €50 million: 30%
A key feature of this initiative is that it will apply to investments in existing enterprises, not only new ones.
Compensation of capital investments through taxes is a new development policy tool for Ukrainian manufacturers under the “Made in Ukraine” programme, announced by President Volodymyr Zelensky in February 2024.
It includes programmes for developing producers with a focus on the processing industry, such as accessible loans under the “5-7-9” programme, grants of UAH 8 million for equipment and UAH 16 million for restoration, industrial parks, support for large investment projects (from €12 million), simplified land reallocation, and insurance of investments against war and political risks.
