The President of Ukraine Volodymyr Zelensky signed the Law “On Amendments to Section XX“ Transitional Provisions ”of the Tax Code of Ukraine on Stimulating the Development of Ecological Transport in Ukraine” № 1660-IX and the Law “On Amendments to Paragraph 4 of Section XXI“ Final and Transitional Provisions ” Of the Customs Code of Ukraine on Stimulating the Development of the Ecological Transport Sector in Ukraine ”№ 1661-IX, adopted by the Verkhovna Rada on July 15, 2021.
These documents are aimed at increasing the share of environmentally friendly transport in Ukraine by increasing the availability of consumers and stimulating the development of production in our country of electric vehicles, trams and subway cars, vehicles with internal combustion engines with spark ignition, operating exclusively on compressed or liquefied methane or biogas.
To this end, the laws provide for the application of a number of tax preferences. Until January 1, 2026, value added tax (VAT) transactions on import and supply in Ukraine of vehicles equipped with electric motors, as well as new cars with internal combustion engines operating exclusively on compressed or liquefied, are temporarily exempt from value added tax (VAT). methane or biogas.
Also, until January 1, 2031, the import of a number of goods into Ukraine by enterprises that build or upgrade their production facilities to create the above vehicles is exempt from VAT and import duties (this does not apply to goods from the country recognized by the occupying state or aggressor state, and goods from the occupied territory of Ukraine).
In addition, until December 31, 2035, the profits of enterprises that manufacture these vehicles, as well as electric motors, lithium-ion (lithium-polymer) batteries and chargers to them are exempt from taxation, provided the released funds are sent to research and development. design work in the field of electric transport, creation or re-equipment of material and technical base, increase of production volume, introduction of the newest technologies.
The adoption of these laws will help protect the environment, as it will help reduce air pollution, stimulate increased investment in the automotive, electrical sector of Ukraine’s economy and create new jobs.
These laws come into force on January 1, 2022.