Draft Law on Amendments to the Tax Code of Ukraine Regarding the Adoption of the Law of Ukraine “On Integrated Prevention and Control of Industrial Pollution”

Analysis of the draft law:

Analysis of the Draft Law of Ukraine on Amendments to the Tax Code

Greetings! Today we will analyze an important draft law that introduces amendments to the Tax Code of Ukraine in connection with the adoption of the Law “On Integrated Prevention and Control of Industrial Pollution”, as well as in order to improve certain provisions of tax legislation.

Essence of the draft law

The draft law provides for comprehensive changes to the Tax Code of Ukraine, aimed at adapting tax legislation to environmental standards, in particular, those relating to industrial pollution. In addition, the draft introduces clarifications to the taxation of agricultural cooperatives and patronage dividends, as well as regulates certain technical aspects of tax administration. Also, changes are envisaged regarding the taxation of prisoners of war.

Structure and main provisions

The draft law consists of two main sections:

• Section I – amendments to the Tax Code of Ukraine.
• Section II (Final and Transitional Provisions) – defines the terms for the entry into force of certain provisions of the law and contains amendments to other legislative acts.

Most important changes:

• Integrated prevention and control of industrial pollution:
  • Changes are introduced regarding rent for water use and consideration of integrated environmental permits.
• Taxation of agricultural cooperatives:
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* The concept of “patronage dividends” and the specifics of their taxation are introduced.
* The conditions for taxation of agricultural cooperatives operating on a non-profit basis are clarified.
* Rules for accounting for financial results for the payment of patronage dividends are established.

Specifics of taxation of certain categories of persons:

• Issues of taxation of prisoners of war are regulated.
• The rules for submitting tax reports by tax agents, in particular individual entrepreneurs, are clarified.

Land tax:

• Tax rates are established for land plots granted to mining enterprises.
• The conditions for using land plots on the terms of emphyteusis are clarified.

VAT:

• Operations for the gratuitous transfer of engineering infrastructure facilities of land reclamation systems to water user organizations are temporarily exempt from VAT.

Other important changes:

• Changes regarding tax debt for subsoil users.

Key provisions for different groups

This draft law contains provisions that may be important for different groups:

• For legislators:
  • The need to adapt tax legislation to new environmental requirements.
  • Settlement of taxation issues for certain types of activities (agricultural cooperatives, mining enterprises).
• For experts:
  • The need to analyze the impact of changes on various sectors of the economy and on

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