Verkhovna Rada of Ukraine adopted the Law of Ukraine № 2330-IX as of 21.06.2022 "On amendments to the Tax Code of Ukraine on creating favorable conditions for activity of industrial parks in Ukraine" (hereinafter – Law).
Law defines favorable tax conditions for creating incentives for domestic industrial parks to ensure their competitiveness and ability to attract necessary investments to Ukraine, especially during the martial law on the territory of Ukraine for the relocation of industrial enterprises from eastern regions of the country.
With regard to the income tax, the Law provides for exemption possibility from income taxation of industrial park’s participant included in the Register of Industrial Parks, from carrying out economic activities in the processing industry spheres (Section 10, Class 11.07 Section 11, Sections 13-17, 20-33 KVED 009:2010, except for Class 24.10 Section 24 KVED 009:2010 and production of vehicles intended for transportation of 10 people or more, as well as transportation of goods); in the waste collection sphere, processing and disposal; recovery of materials (Section 38 KVED 009:2010); except for the waste disposal or research activities (Section 72 KVED 009:2010), exclusively on the territory of industrial park during 10 consecutive years starting from the first day of the first month of a calendar quarter, which was determined by the taxpayer-participant of industrial park in an application submitted by such taxpayer-participant to the supervisory body at the registration place of such taxpayer on the use of a right to apply exemption provided for in this Paragraph but not earlier than the day of submission of such application.
Data from the Register of Industrial Parks is used in order to confirm the status.
At the same time, participants of industrial park – legal entities whose authorized capital includes a share belonging to legal entities that are organizers of gambling games or registered in states (territories) classified as offshore zones, or included to the list of states that do not cooperate in the money laundering combating sphere do not have a right to apply the specified taxation rules.
Amount of funds exempted from taxation (amounts of income tax that are not paid to the budget and remain at the disposal of taxpayer-participant of industrial park) is directed to development of activities of participant of industrial park within the boundaries of industrial park.
Procedure for use of tax-exempted funds by the industrial park participant for development of its activities is approved by the Cabinet of Ministers of Ukraine.
With regard to the value added tax, residents of industrial parks receive state incentives in the form of exemption from the VAT for operations involving importation of equipment to the customs territory of Ukraine according to the list of codes according to Ukrainian classification of the FEA products with obligation to use it exclusively within the boundaries of industrial parks, without a right to provide for rent, leasing or transfer for use on under any conditions for a period of 5 years.
Import and intended use of products will be established by the Cabinet of Ministers of Ukraine.
In order to strengthen state assistance to business entities – participants of industrial parks included in the Register of Industrial Parks, to stimulate development of industrial parks as tools for the growth of economic activity in Ukraine, the Tax Code of Ukraine establishes a reduction in regulation of powers of local self-government bodies in terms of providing tax benefits for land plots of industrial parks, normative monetary assessment of which has been completed.
In particular, right to approve land tax and rent rates for the specified land plots in amount smaller than their amount, which is established by such bodies for a certain category of land within the relevant territory, is granted.
Exemption from the land tax payment is also granted.
At the same time, amendments to the Tax Code of Ukraine do not provide for granting local self-government bodies a right to establish tax benefits for land plots of industrial parks included in the Register of Industrial Parks, normative monetary assessment of which has not been fulfilled.
Measures similar in content to increase state aid to business entities – participants of industrial parks included in the Register of Industrial Parks have been extended to the tax on immovable property other than land, regarding the right to establish tax benefit.