Kiev - On 10 December 2018, the Ukrainian President signed Law No. 2628-VIII dated 23 November 2018 “On Amendment to the Tax Code and Certain Other Legal Acts of Ukraine in Relation to Improvement of Management and Revision of Certain Taxes” (the “Law”), which among other things facilitates development of renewable power plants (“RPPs”) by allowing these plants on land designated for use in “industry, transport, telecommunications, energy, defence and other designation”. In short, the types of land on which RPPs can be developed has been greatly expanded.
The Law, which also exempts the import of certain RPP equipment from Value Added Tax (VAT), comes into force on 1 January 2019.
DEVELOPMENT OF RPPS ON INDUSTRIAL LANDS
Once in force, the Law will allow RPPs to be developed not only on land designated as “land for energy”, but also on land designated within the generic category “land for industry, transport, telecommunications, energy, defence and other designation”. In other words, the Law allows the development of RPPs on plots of other official use (e.g. land for machine building industry) without having to change the land’s designation.
VAT EXEMPTION FOR IMPORT OF RPP EQUIPMENT
Starting from 1 January 2019 and until 31 December 2022, the Law will exempt from Ukrainian VAT RPP equipment imported under the following codes of the Ukrainian Classification of Goods of Foreign Economic Activity (UCGFEA):
•wind power generation units (UCGFEA code 8502 31 00 00);
•pv cells, modules and panels, light emitting diodes (UCGFEA code 8541 40 90 00); •liquid dielectric transformers with capacity exceeding 10,000 kVA (UCGFEA code 8504 23 00 00); and
•invertors with capacity exceeding 7.5 kVA (UCGFEA code 8504 40 88 00).
To be exempt from VAT, the classification of imported RPP equipment under the UCGFEA codes must be confirmed by Ukrainian customs authorities.
(Source: CMS Law Now - For more information on this law and the development of renewable power plants in Ukraine, please contact authors of this publication. Follow this link to an earlier Law-Now article on simplification of RPP construction).