“The Verkhovna Rada launched the implementation of the investment compensation mechanism: a joint initiative of the FPU and people’s deputiesThe Verkhovna Rada adopted in the first reading draft laws No. 13414 and No. 13415, which provide for compensation of part of
industrial investments through tax mechanisms. This initiative, developed by the Federation of Employers of Ukraine and people’s
deputies, is aimed at stimulating investments and restoring industry.
”, — write: unn.ua
This refers to the creation of a modern system of investment incentives, which has long been operating in the countries of the European Union, where the state compensates investors a certain percentage (for example, 50% or 70% of investment costs), especially in regions that need development.
“Today, all of Ukraine is a territory that needs economic recovery. And the introduction of such a mechanism is a logical, timely and critically important decision,” the FUU notes.
The initiative provides that compensation through taxes will be received by enterprises that invest in the construction or modernization of production facilities, the purchase of new equipment or the acquisition of land plots for the development of the processing sector.
How compensation will be madeCompensation will be made at the expense of paid taxes on profit, property, land, as well as import VAT and customs duties. Its size will depend on the volume of investments:
● 70% – for projects from €100 thousand to €1 million
● 50% – from €1 million to €20 million
● 30% – from €20 million to €50 million
It is especially important that the mechanism will be available not only for new but also for existing enterprises that are expanding or modernizing their production capacities, which significantly expands the potential of the initiative.
According to the CMD-Ukraine analytical center, the implementation of the draft laws can attract from $3 to $8 billion in investments to Ukraine over the next 10 years and ensure GDP growth of 0.3–5.37% depending on the scenario.
Draft laws No. 13414 and No. 13415 are a continuation of the implementation of the “Made in Ukraine” policy, which aims to create favorable conditions for production, export and investment within the country.
The Federation of Employers of Ukraine is a co-initiator of this policy and systematically promotes tools for industrial recovery: the law on localization, programs for partial compensation of the cost of Ukrainian equipment, and the development of exports of machine-building products.