Ukraine’s government considers lowering threshold for investment projects to qualify for tax breaks
Prime Minister of Ukraine Denys Shmyhal (Photo:Denys Shmyhal/Telegram)
Ukraine’s Cabinet of Ministers has proposed that the Verkhovna Rada, Ukraine’s parliament, update the Law of Ukraine “On State Support for Investment Projects with Significant Investments,” Ukrainian Prime Minister Denys Shmyhal said at a cabinet meeting on Oct. 18.
Shmyhal said it was recommended that the threshold for granting tax relief to investment projects be lowered from EUR 20 million to EUR 12 million.
“Despite the war, we have seven simultaneous applications from large investors who are now ready to invest, create new jobs and (generate) export earnings,” he said.
The Cabinet of Ministers also proposed expanding the scope of the law to the production of energy-efficient building materials, climate-control equipment, heating and air conditioning systems, and hot water supply systems.
The minister says he believes such changes would ensure that business invests hundreds of millions in “important projects of our economy and the country.”
The Law of Ukraine “On State Support for Investment Projects with Significant Investments” adopted in December 2020 provides for the exemption from certain taxes for projects with investments of EUR 20 million or more.
It is stipulated that the total amount of state support should not exceed 30% of the amount of investment in a project.
The investor can get special tax benefits when creating at least 80 new jobs with an average salary of employees at least 15% higher than the average salary for the relevant activity in the region.
In mid-February, the government authorized UkraineInvest, an independent advisory body, to accompany projects with significant investments.
Meanwhile, in early March, the law on state support for investment projects was supplemented by relevant amendments to the Tax and Customs Codes regarding tax breaks for periods of up to 15 years.
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