Producers will be able to return up to 70% of their investments through taxes: Rada prepares compensation mechanism
12 August 21:56
The Tax Committee of the Verkhovna Rada has supported bills on compensation for capital investments through taxes. This was announced by the initiator of the projects, MP Dmytro Kysylevskyi, "Komersant Ukrainian" reports.
on August 12, the Parliamentary Committee on Finance, Taxation, and Customs Policy supported draft laws 13414 and 13415 for consideration in the first reading. Their goal is to integrate the European mechanism of compensation for capital investments through tax instruments into Ukrainian legislation. According to Kysylevsky, the adoption of these norms will be an additional incentive for the development of production under the “Made in Ukraine” strategy .
The relevant committee approved the integration of the mechanism of compensation for capital investments through taxes, which has been successfully applied in the EU, into Ukrainian legislation. The next step is consideration by the Rada. All industrialists are waiting for this law,” Kysylevsky said.
Authors of the bills and political support for the documents
The draft laws were co-authored by Dmytro Kysylevskyi, Danylo Hetmantsev, Andriy Motovylovets and 52 other MPs from different factions and groups. Such a wide political spectrum of support, according to the authors, increases the chances of the documents being passed in the parliament.
What investments will be eligible for compensation
The mechanism will be available for projects in the processing industry. It is a partial compensation of the company’s expenses through tax payments. The following costs will be eligible for compensation:
- construction of engineering networks, facilities, and related infrastructure;
- purchase or construction of production facilities, their modernization and technological re-equipment
- purchase of production equipment;
- purchase of land plots for production purposes.
Tax instruments of compensation
Partial reimbursement will be made by paying the following taxes:
- income tax
- import VAT on equipment;
- import duty on equipment;
- property tax;
- land tax.
This means that companies will actually be able to reduce their tax liabilities by an amount proportional to the amount of investment.
The amount of compensation depends on the investment
The mechanism provides for a differentiated approach:
- for projects costing from EUR 100 thousand to EUR 1 million – compensation of up to 70% of the costs;
- eUR 1 million to EUR 20 million – up to 50%;
- from EUR 20 million to EUR 50 million – up to 30%.
Unlike many other programs, the new model will apply not only to newly established companies, but also to operating enterprises that are implementing investment projects to expand or modernize production.
Read also: How to get 25% compensation for Ukrainian agricultural equipment: conditions for 2025
Connection with the “Made in Ukraine” policy project
The Investment Compensation Program is a continuation of the policy of supporting domestic producers announced by President Volodymyr Zelenskyy in February 2024. This strategy focuses on stimulating the manufacturing industry and creating high value-added jobs.
The project already includes
- 5-7-9 affordable loan program;
- grants of up to UAH 8 million for the purchase of equipment and up to UAH 16 million for the restoration of production;
- development of industrial parks;
- support for projects with significant investments of EUR 12 million or more;
- simplifying the change of land use designation;
- insurance of investments against military and political risks.
Expected effect on the economy
According to the initiators, the adoption of the draft laws will allow Ukrainian enterprises to invest more actively in modernization, reducing the financial burden at the start of projects. This, in turn, should stimulate economic growth, increase exports of high value-added products, and improve Ukraine’s competitiveness in the international market.
Economists note that this model is already working successfully in the EU, allowing private capital to be attracted to strategic industries even in the face of limited access to credit. If the draft laws are approved by the end of the year, the first companies will be able to use the compensation mechanism in 2026.
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