As of 07.09.2021 Ukraine’s Parliament adopted the amendments to the law of Ukraine "On Industrial Parks" aimed at attracting investments into an industrial sector of the economy of Ukraine.
These newly-adopted amendments provide for a variety of economic incentives that meet the modern world trends and are intended to increase the volume of direct investments in the industrial parks of Ukraine, as well as their competitiveness. Among those incentives are the following:
● An opportunity to carry out an economic activity for processing industrial and/or household waste (except for disposal) within industrial parks.
● Eased minimum (from 15 hectares to 10 hectares) and maximum requirements for total area of industrial parks (from 700 hectares to 1000 hectares).
● Introduced opportunity to startup "brownfield" investment projects within industrial parks.
● Exemption from reimbursement of agricultural losses, when using land plots for the placement of industrial (industrial) parks.
● Full or partial compensation of interest rates on loans, non-refundable financing. Respective incentives could be provided to managing companies, companies-initiators and/or participants of industrial parks for the purpose of arranging an industrial park, as well as for the purpose of carrying out economic activity within an industrial park in accordance with the procedure established by the Cabinet of Ministers of Ukraine. The respective order, which will introduce the procedure for applying for the above incentives shall be adopted by the Cabinet of Ministers of Ukraine within 6 months from the date of coming into force of this amendments (until March 2022)
● Compensation for connecting to engineering grids (incl. compensation for connecting to the electric grid). The respective incentive could be provided to managing companies and/or companies-initiators of industrial parks at the expense of state, local budgets and other sources not prohibited by law, in accordance with the procedure established by the Cabinet of Ministers of Ukraine. The respective order, which will introduce the procedure for applying for the above incentives shall be adopted by the Cabinet of Ministers of Ukraine within 6 months from the date of coming into force of this amendments (until March 2022)
In order to guarantee the implementation of above-mentioned forms of state incentives, a mandatory provision regarding assigning at least UAH 2 bln on arranging of industrial parks in state budgets’ expenditures has been introduced for the period of 2022-2026.
Apart from the amendments to the law of Ukraine "On Industrial Parks" dated 07.09.2021, additional tax and customs incentives have been announced by the registration at the Verkhovna Rada of Ukraine of draft laws No. 5688 and 5689.
The accompanying draft law No. 5688 dated 26.06.2021, which provides for amendments to the Tax Code of Ukraine, will in future allow participants of industrial parks to use the following tax incentives:
● CIT Exemption. Participants of industrial parks would be able to apply for a 10-year CIT exemption on income earned from their business activity within the industrial park. However, the respective CIT exemption would be applied only if the respective amount of money will be reinvested by the participant into the development of the investment project. Such an exemption will be applied by a controlling authority for 10 consecutive years from the moment of submission of the relevant application by the participant of the industrial park.
● VAT exemption on operations of importing of new equipment (components) by the participants of industrial parks. In order for such an exemption to be applied, the respective equipment (components) shall be intended only for the own use of the participant of industrial parks.
● Favourable land tax rates. The draft law No. 5688 stipulates that by decision of the local self-government body participants of industrial parks might be granted more favorable land tax rates.
The accompanying draft law No. 5689 dated 26.06.2021 provides for amendments to the Customs Code of Ukraine, which will allow participants of industrial parks to use exemption from taxation of customs duties on new equipment (components) imported by such participants for their own use only