G/SCM/N/253/UKR  
 
11 July 2013  
(13-3675)  Page: 1/16  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF 
THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON 
SUBSIDIES AND COUNTERVAILING MEASURES 
UKRAINE  
The following communication, dated 2 July 2013, is being circulated at the request of the 
Delegation of Ukraine. 
 
_______________ 
 
 
TABLE OF CONTENTS 
1   INTROD UCTION  .......................................................................................................... 2  
1.1   PART I. HORIZO NTAL PROGRA MMES ............................................................................ 2  
1.1.1   Special Economic Zone s and Priority Territories ........................................................... 2  
1.1.2   Technological Parks ................................................................................................. 2  
1.2   PART II. SECTORAL PROGRAMMES ............................................................................... 4  
1.2.1   Shipbuilding .......................................................................................................... . 4 
1.2.2   Aircraft .................................................................................................................. 6  
1.2.3   Machinery for agriculture ......................................................................................... 9  
1.2.4   Spac e industry ...................................................................................................... 10 
1.2.5   Coal Mining ........................................................................................................... 12 
1.2.6   Book-Publishing ..................................................................................................... 15 
 
  
 
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  1  INTRODUCTION 
This notification was prepared pursuant to Ar ticle XVI:1 of the GATT 1994 and Article 25 of the 
Agreement on Subsidies and Countervailing Measures.   
This notification relates to subsidies granted in  2011 and 2012, and provides statistical information 
for respective years.  
	
In preparing this notification, Ukraine has taken into account applicable "General Rules" listed in 
G/SCM/6/Rev.1.  
 
1.1  PART I. HORIZONTAL PROGRAMMES 
1.1.1  Special Economic Zones and Priority Territories 
In reporting period the investment projects in SEZ and Priority Territories are implemented under 
the regular tax regime.   
During reporting period there were not any changes in respect to policy/objective, background and 
authority, form of the subsidy, to whom and how the subsidy is provided, in comparison with information given in G/SCM/N/155/UKR of 26 May 2008, G/SCM/N/186/UKR of 3 July 2009 and G/SCM/N/220/UKR of 7 July 2011.  
 
Some tax privileges were granted to some enterprises by judgement of courts only.  
Total amount: 
 
Form of Subsidy SEZ, thousand UAH Priority Territories, thousand UAH 
 2011 2012 2011 2012 
Exemption from income tax 0 772,0 0 0 
Exemption from import duties 0,1 0 0 0 
Deferment of VAT 156 900 219 500 0 0 
Exemption from land tax 38,8 38,8 0 0 
 
1.1.2  Technological Parks 
Policy objective and/or purpose 
 
Encourage investment, promotion of research  and development of new technologies.  
 
Background and authority 
 
The basic legislative acts providing for the establishment and functioning of the technological parks 
are contained in:   
- Law of Ukraine "On Changes to the Law of Ukraine "On Special Regime of Innovation 
Activity of the Technological Parks" and other laws of Ukraine" of 12 January 2006 
No. 3333-IV (with changes and amendments);  
- Law of Ukraine "On priority directions of the science and technology development" of 
11 July 2001 No. 2623-III (with changes and amendments);  
- Law of Ukraine "On priorities of the Innovati on Activity in Ukraine" of 16 January 2003 
No. 433-IV (with changes and amendments);  
- Decree of the Cabinet of Ministers of Ukraine of 17 December 1999 No. 2311 (with 
changes and amendments) approving the Proced ure of Consideration and Approval of the 
Priority Directions of Activity of the Technological Park, the Procedure of Consideration, Examination and Registration of Technological Park's Projects;  
- Decree of the Cabinet of Ministers of Ukrain e of 2 February 2011 No. 118 approving the 
procedure of accumulation of corporate income tax amounts on special account of technological park, use and control of such amounts;  
- Decree of the Cabinet of Ministers of Ukra ine of 21 March 2007 No. 517 approving the 
procedure of control and monitoring of the technological parks projects implementation;  
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  - Decree of the Cabinet of Ministers of Uk raine of 29 November 2006 No. 1657 approving 
procedure for state registration of technological parks.  
 Incentives offered in the form of accumulation of  import duty and credit support are reflected in 
the relevant laws.  
 
- Law of Ukraine of 23 December 2010 No. 2257- IV "On State Budget of Ukraine for 2011" 
(with changes and amendments);  
- Law of Ukraine of 22 December 2011 No. 4282- VI "On State Budget of Ukraine for 2012" 
(with changes and amendments);  
- Law of Ukraine "On Customs Tariff of Ukraine"  as amended by the Law of Ukraine of 21 
December 2010 No. 2829-VI. 
 
According to the Law of Ukraine of 02.12.2010 No.2759-VI "On Amendments to Certain Legislative 
Acts of Ukraine in connection with adoption of the Tax Code of Ukraine" (effective from 
01.01.2011) there has been amended the regime of innovation activity of technological parks, 
according to which, subsidies in the form of exemption from income tax and VAT payment deferral 
were eliminated. 
 Form 
 
Accumulation of import duty and credits support.  
 Explanation of benefits 
 Accumulation of import duty  
Amount of import duties, which accrued during the import of new materials, equipment, 
components used to implement technological park s projects and are not produced in Ukraine, 
transferred to a special account and used solely for the purpose of scientific and technological activities, the development of scientific technica l and scientific research base of the parks. 
 
Credit support 
 Since 2006 each year the State Budget of Ukraine should foresee certain budget for:  
 
 Full or partial (up to 50 per cent) loans with zero interest (with inflation indexation) for 
park's projects;  
 Full or partial compensation of interest paid  by park's project implementation authority to 
commercial banks and other finance institutions for loans for park's projects.  
 In 2011 and 2012 there has not been foreseen any funds in the State Budget for loan support. 
 
Beneficiaries 
 
Beneficiaries of the favourable regime are technological parks, their participants and joint 
enterprises implementing innovative projects in priority areas.   
Technological park – is a legal person or association of legal persons which are implementing 
innovative projects, implication of high technology developments.   Priority directions for each park are develope d according to the Law of Ukraine "On Priority 
Directions of Science and Technology Development" of 11 July 2001 No. 2623-III, Law of Ukraine 
"On Priorities of Innovative Activity in Ukrain e" of 16 January 2003 No. 433-IV, considered by the 
Presidium of the National Academy of Science and approved by the central government authority 
responsible for science issues.  
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  Amount 
 
 2011, 
thousand UAH 2012, 
thousand UAH 
Usage of sums of import duty that are accumulated on a special accounts of parks and projects 0 0 
Credit support (Full or partial compensation of 
interest paid by park's  project implementation 
authority to commercial banks and other finance institutions for loans) Not applied Not applied 
 
Duration 
 The favourable regime for technological parks established for the period of 15 years.   
Trade effects 
 
It is not possible to estimate what, if any, trade effects may result from the use of the programs 
described.  
 1.2  PART II. SECTORAL PROGRAMMES 
The legislative bases for Ukraine's sectoral programs are found in:  
 
- Enabling legislation specific to the sector itself (shipbuilding, aircraft etc.) cited below for 
each Sector; and 
- The law applying a particular tax measure under for which assistance is provided 
(exemptions or deferral for import duties, VAT etc.). 
- Law on state budget for respective year.  
- Law of Ukraine of 23 December 2010 No. 2257- IV "On State Budget of Ukraine for 2011" 
(with changes and amendments);  
- Law of Ukraine of 22 December 2011 No. 4282- VI "On State Budget of Ukraine for 2012" 
(with changes and amendments).  
 
The Sector specific enabling legislation is identified under each of the supported sectors listed below. The relevant tax laws providing benefits to enterprises in supported sectors are:  
 
- Law of Ukraine "On Customs Tariff of Ukraine"  as amended by the Law of Ukraine of 21 
December 2010 No. 2829-VI;  
- Customs Code of Ukraine (Law of  Ukraine of 13.03.2012 No. 4495-VI); 
- Tax Code of Ukraine (Law of Ukraine of 02.12.2010 No.  2755 - VI). 
 
1.2.1  Shipbuilding 
Policy objective and/or purpose 
 
The overall objectives for providing assistance to the shipbuilding industry are to:  
 
- Promote better use of the industry's existi ng production and Research and Development 
facilities; and  
- Encourage new investment in the industry to achieve greater efficiency and 
competitiveness.  
 Background and authority 
 Until 1 January 2012 the subsidy measures were provided under the Law of Ukraine "On Measures of State Support for the Ship-Building Indust ry in Ukraine" No. 1242-XIV (amended as of 
15 June 2004 No. 1766-IV) and the Decree of the Cabinet of Ministers of Ukraine No. 1256 of 
21 December 2005 (with changes and amendments) a pproving the list of enterprises-beneficiaries 
of support of shipbuilding industry.  
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  In 2012, support was provided in accordance with the provisions of the Tax Code. 
 Form 
Credit support 
 
Since 1 January 2005, the support of seagoing crafts, river boats and other floating means, building and reconstruction of basic production assets of shipbuilding industry was exercised by 
partial compensation of the interest paid to commercial banks for the provided credits. Every year 
a certain budget allocation should be foreseen by the Law of Ukraine "On State Budget" for providing such a support.   
The procedure of use of such allocations from the State Budget is annually determined by the 
Cabinet of Ministers of Ukraine.   
Though, in 2011 and 2012 no allocations were made for this purpose. 
 VAT payment deferral 
 Pursuant to section 3 of the Tax Code, the importation by shipbuilding enterprises under the customs regime into the customs territory of Uk raine of equipment and components that are not 
produced in Ukraine for use in economic activities, provided that customs declaration is completed, 
may present on their own customs authority (a customs authority shall accept) tax bill in the 
amount of tax liability on the value added tax, de termined in such a customs declaration. List of 
equipment and components that are imported by do mestic enterprises of shipbuilding industries 
and are not produced in Ukraine, is approved  by the Cabinet of Ministers of Ukraine. 
 Exemption from import duties 
 In accordance with paragraph 4 (6) of the transitional provisions of the Customs Code of Ukraine temporarily, until 1 January 2016, from import duty  for importation into the customs territory of 
Ukraine and placing into the import customs regime are exempted: 
 
 equipment and components that are not produced in Ukraine and imported to the customs 
territory of Ukraine by domestic enterprises of shipbuilding industry for use in their 
economic activities. The list of these goods with indication of tariff codes is approved by the 
Cabinet of Ministers of Ukraine. 
 
The Resolution of the Cabinet of Ministers of Ukraine of 28 May 2012 No. 466 "On approval of the 
list of equipment and components that are not pr oduced in Ukraine and imported to the customs 
territory of Ukraine by domestic enterprises of shipbuilding industry for use in economic activities, 
that are temporarily exempt from import duty when  imported into the customs territory of Ukraine 
and the placed into the customs regime of import".  
Exemption from corporate income tax 
 
In accordance with subsection 17 of Section 4 of the Tax Code of Ukraine, starting from 
01.01.2011 and for a period of 10 years, shipbuilding  enterprises shall be exempted from taxation 
income earned from their operations.   
Exemption from land tax 
 
In accordance with subsection 6 of Section 4 of the Tax Code of Ukraine, until 1 January 2016 shipbuilding enterprises shall be exempted from land tax.  
 
Beneficiaries 
 
The Cabinet of Ministers of Ukraine approves a list of eligible shipbuilding enterprises according to 
the order determined in the Decree of Cabinet of Ministers of Ukraine of 12 July 2005, No. 555. 
The current approved list of enterprises appears in  the Resolution of the Cabinet of Ministers of 
Ukraine of 21 December 2005, No. 1256 (last chan ges – by Decree of Cabinet of Ministers of 
Ukraine of 10 June 2009 No. 574).   G/SCM/N/253/UKR 
 
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  Amount 
 
 2011, thousand UAH 2012, thousand UAH 
Credit support Not applied Not applied 
Exemption from import duties  - - 
Deferment of VAT - - 
Exemption from income tax 7090,8 4157,5 
Exemption from land tax 11456,2 33261,2 
 
Duration 
 Duration depends on the forms of support me ntioned above in the relevant paragraphs. 
 
Statistics for evaluation of trade effect 
 
Amount of production* 2011, thousand UAH 2012, thousand UAH 
Seagoing crafts and other floating 
means 1 354 896 1 396 800 
*	Total	production,	including	pr oduction	of	enterprises‐benefic iaries		
 
1.2.2  Aircraft 
Policy objective and/or purpose 
 
The overall objective for providing aid to the aircraft construction industry is to promote an 
efficient use of existing production, research and development facilities and to encourage investment to provide for modernization of the industry.  
 
Background and authority 
 Support is provided in accordance with th e Law of Ukraine of 20.01.10 No. 1814-VI "On 
amendments to some of the laws of Ukraine concerning state support to aircraft industry in 
Ukraine".  
The Decree of the Cabinet of Mini stries of Ukraine of 21.07.10 No . 680 "On import on the customs 
territory of Ukraine of goods by aircraft ente rprises" (with changes and amendments) clarifies 
requirements concerning eligible import volumes and ensuring of its proper end use. 
 
Form 
 Exemption from import duty  
 In 2011 and 2012 in accordance with paragraph 4 of  subsection 2 of section XX "Transitional 
Provisions" of the Tax Code of Ukraine (the  Law of Ukraine of 02.12.2010 No. 2755 - VI), 
subparagraph 2 of paragraph 4 of Section XXI "Transitional Provisions" of the Customs Code 
Ukraine (Law of Ukraine Act of Ukraine of 13.03.2 012 No. 4495-VI) with item "r" of first part of 
Art.19 of the Law "On Common Customs Tariff" exemption from import duty concerns goods, what 
imported (reimported) by aircraft enterprises eligible by the Art.2 of the Law "On aircraft industry 
development", by such HS (UKTZED) codes:   2707 20 90 00, 2707 30 10 00, 2707 99 80 00, 2710 11 21 00, 2710 19 81 00, 2710 19 99 00, 
2712 20 90 00, 2805 30 90 00, 2818 10 90 00, 2827, 2835, 3204 90 00 00, 3207 40 30 00, 3208, 
3209, 3211 00 00, 3214 10 10 10, 3603 00, 3604 90 00 00, 3703 10 00 00, 3703 90 10 00, 3824 10 00 90, 3824 90 35 00, 3824 90 40 00, 3824 90 50, 3824 90 65 00, 3901, 3909, 3911, 3917, 
3919, 3920, 3921, 4002, 4005, 4006 90 00, 4008, 4009, 4011 30 00 30, 4016, 4017 00, 7003, 
7007, 7019, 7202, 7205 10 00 00, 7205 29 00 00, 7207, 7208, 7209, 7211, 7212, 7213, 7214, 7215, 7217, 7218, 7219, 7220, 7221 00 10 00, 7223 00, 7224 90 18 00, 7225, 7226, 7227, 7228, 
7229, 7304, 7311 00 10 00, 7312, 7315, 7318, 7326, 7407, 7409, 7411, 7413 00, 7419, 7502, 
7504 00 00 00, 7505, 7506, 7507, 7508, 7601, 7603, 7604, 7605, 7606, 7607 11 90 00, 7607 19 99 00, 7607 20 91 00, 7608, 7609 00 00 00, 7616, 8101, 8102, 8104, 8105, 8108, 8111 00 90 00, 8112, 8307, 8409 10 00 00, 8411 11 00 00, 8411 12, 8411 21 00 00, 8411 22 20 00, 8411 22 
80 00, 8411 81 00 00, 8411 82, 8411 91 00 00, 8411 99 00 00, 8412 10 00 10, 8412 21 80 10, G/SCM/N/253/UKR 
 
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  8412 29 89 10, 8412 31 00 91, 8412 39 00 10, 8412 80 80 10, 8412 90 20 10, 8412 90 80 10, 
8413 19 00 00, 8413 20 00 00, 8413 30 20 00, 8413 30 80 00, 8413 50 40 00, 8413 50 69 00, 8413 50 80 00, 8413 60 39 00, 8413 60 69 00, 8413 60 70 00, 8413 60 80 00, 8413 70 21 00, 8413 70 29 00, 8413 81 00 00, 8413 91 00 90, 8414 10 89 10, 8414 20 80 10, 8414 30 20 10, 
8414 30 81 10, 8414 30 89 10, 8414 51 00 10, 8414 59 20 91, 8414 59 40 10, 8414 59 80 10, 
8414 80 11 10, 8414 80 19 10, 8414 80 22 91, 8414 80 28 10, 8414 80 73 91, 8414 90 00 00, 8415 81 00 30, 8415 82 00 30, 8415 83 00 10, 8415 90 00 00, 8419 50 00 00, 8419 81 20 10, 
8419 81 80 10, 8419 90 85 00, 8421 19 70 10, 8421 21 00 00, 8421 23 00 30, 8421 29 00 00, 
8421 31 00 00, 8421 39 20 00, 8424, 8425 11 00 00, 8425 19 80 00, 8425 31 00 00, 8425 39 30 00, 8425 39 90 00, 8425 42 00 00, 8425 49 00 00, 8443 32 10 00, 8456, 8457, 8458, 8459, 8460, 8461, 8462, 8463, 8466, 8471 30 00 00, 8471 41 00 00, 8471 49 00 00, 8471 50 00 00, 
8471 60 60 00, 8471 60 70 00, 8471 70, 8473 30, 8479 89 97 90, 8481, 8482, 8483, 8501 20 00 
10, 8501 31 00 10, 8501 32 20 10, 8501 32 80 10, 8501 33 00 10, 8501 34 92 10, 8501 34 98 10, 8501 40 20 10, 8501 40 80 10, 8501 51 00 10, 8501 52 20 10, 8501 52 30 10, 8501 52 90 
10, 8501 53 81 00, 8501 61 20 10, 8501 61 80 10, 8501 62 00 10, 8501 63 00 10, 8502 11 20 
10, 8502 11 80 10, 8502 12 00 10, 8502 13 20 10, 8502 13 40 10, 8502 13 80 10, 8502 20 20 10, 8502 20 40 10, 8502 20 60 10, 8502 20 80 10, 8502 39 20 10, 8502 39 80 10, 8502 40 00 
10, 8504 10 20 10, 8504 10 80 10, 8504 31 80 00, 8504 32 20 10, 8504 32 80 10, 8504 33 00 
10, 8504 40 90 00, 8504 50 20 10, 8504 50 95 10, 8505, 8506, 8507 10 41 10, 8507 10 49 10, 8507 10 92 10, 8507 10 98 10, 8507 20 41 10, 8507 20 49 10, 8507 20 92 10, 8507 20 98 10, 8507 30 89 00, 8507 40 00 00, 8507 80 80 00, 8507 90 90 00, 8511 10 00 10, 8511 20 00 10, 
8511 30 00 10, 8511 40 00 10, 8511 50 00 10, 8511 80 00 10, 8515, 8517 70 11 00, 8517 70 19 
10, 8525 50 00 10, 8525 60 00 00, 8526 10 00 10, 8526 91 20, 8526 91 80, 8526 92 00 10, 8528 41 00 00, 8528 51 00 00, 8528 59 90 00, 8528 61 00 00, 8529 10 69 10, 8529 10 80 10, 8529 10 
95 10, 8529 90 97 10, 8531 10 95 10, 8531 20 20 10, 8531 20 40 10, 8531 20 95 10, 8531 80 20 
10, 8531 80 95 10, 8532, 8533, 8535, 8536, 8537, 8538 10 00 00, 8538 90 99 00, 8541, 8542, 8543, 8544, 8545, 8546, 9014 10 00 10, 9014 20 20 10, 9014 20 20 90, 9014 20 80 10, 9014 20 
80 90, 9014 90 00 90, 9017 20, 9017 30, 9017 80, 9020 00 00 00, 9023 00, 9024, 9025 11 80 
10, 9025 19 20 10, 9025 19 80 98, 9025 80 20 10, 9025 80 40 10, 9025 90 00 95, 9026 10, 9026 20, 9026 80, 9026 90 00 00, 9027, 9029 10 00 10, 9029 20 38 10, 9030 10 00 00, 9030 20 10 00, 9030 20 30 00, 9030 20 91 00, 9030 31 00 00, 9030 32 00 00, 9030 33, 9030 39 00 00, 9030 
40 00 00, 9030 84 00 00, 9030 89 30 00, 9030 90 85 00, 9031 80 34 00, 9031 90 85 00, 9032 
10, 9032 20 00 00, 9032 81 00 00, 9032 89 00 00, 9033 00 00 00.  
The Cabinet of Ministers approves the volume and procedure for import of such goods (Decree of 
the Cabinet of Ministries of 21.07.10 No. 680).   
If end use of these goods was improper or imported eligible volumes were exceeded then to the 
aircraft enterprises apply provisions of the Law of Ukraine "On the procedure of paying off taxpayers' debts to the Budget and State special funds".  
Exemption from VAT 
 
In accordance with paragraph 4 of subsection 2 of section XX "Transitional Provisions" of the Tax 
Code of Ukraine (the Law of Ukraine of 02.12.2010 No. 2755 - VI) the aircraft enterprises eligible 
by the Art. 2 of the Law "On aircraft industry  development" are exempted from VAT on such 
operations:  
 
 Importation in the customs territory of Ukrain e in the import (reimport) regime of goods 
(except excise goods) what used for aircraft industry needs, if such goods are exempted 
from import duty in accordance with subparagraph 2 of paragraph 4 of Section XXI 
"Transitional Provisions" of the Customs Code of Ukraine (the Law of Ukraine Act of 
Ukraine of 13.03.2012 No. 4495-VI); 
 Supply in the customs territory of Ukraine of re sults of research and development activities 
what conducted for aircraft industry needs.  
 
If legal requirements were violated then to the aircraft enterprises apply provisions of the Law of 
Ukraine "On the procedure of paying off taxpayer s" debts to the Budget and State special funds". 
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  Exemption from land tax 
 
The aircraft enterprises eligible by the Art. 2 of the Law "On aircraft industry development" are exempted from land tax then their land is directly used for production of final products in 
particular: aircraft, its corps, engines, including warehouses, hangars, runways, and places for 
aircraft refuelling poin ts and flight control. 
 
Bonus or accelerated depreciation 
 
In accordance with the Law "On corporate income tax" bonus depreciation is the depreciation of main assets that provides for inclusion of part of the costs for its acquisition (construction) to 
gross costs of the taxpayer and further depreciation of residual value of main assets under general 
norms.  
Accelerated depreciation is the depreciation of m a i n  a s s e t s  w h a t  c a r r i e d  o u t  b y  d o u b l e  g e n e r a l  
norms.   
Simultaneous application of bonus and accelerated depreciation to the same main assets is not 
allowed.  Eligible aircraft enterprises have the right to apply bonus depreciation to the new (which were not 
in use) main assets of 50% to book value of ma in assets of group 3 and 100% for group 4 by the 
results of the first reporting period when objects of such main assets were put into operation if these objects used exclusively for: 
 
a) development and production of aircraft techniques and engines; 
b) conversion, repair, modification, technical service of aircraft techniques and engines; 
c) research and development for aircraft industry. 
 
Exemption from corporate income tax 
 
In accordance with paragraph 17 (r) of subsecti on 4 of the Tax Code of Ukraine from 01.01.2011 
for a period of 10 years aircraft enterprises shall be exempt from corporate income tax, resulting from operations, as well from research and deve lopment work performed by such enterprises for 
the needs of aircraft industry. 
Making payments in foreign currency 
In accordance with the Law of Ukraine of 23.09.94 No. 185/94-VR "On making payments in foreign 
currency" the final payments for export and import transactions of eligible aircraft enterprises are 
carried out not later than 500 calendar days after the transfer of down payments for development, 
production, conversion, repair, modification, technical service of aircrafts and engines.   
Beneficiaries 
 
Legal entities – residents of Ukraine that carry out activity in aircraft industry and have respective 
licences and certificates granting the rights for development or production, or repair, or 
conversion, or modification or technical service of aircrafts and aircraft engines, and meet at least two of the following criteria: 
a) Develop aircrafts and aircraft engines, produce aircrafts and aircraft engines, repair 
aircrafts and aircraft engines; 
b) Fulfil state or military order on development of  aircrafts and aircraft engines, production of 
aircrafts and aircraft engines, repair of aircrafts and aircraft engines; 
c) Ensure implementation of international obligations of Ukraine by international contracts on 
development of aircrafts and aircraft engines, supply of aircrafts and aircraft engines, production of aircrafts and aircraft engines, repair of aircrafts and aircraft engines. 
 
List of eligible aircraft entities approved by  the Decree of the Cabinet of Ministers of 09.06.10 
No. 405 (with changes and amendments). 
 
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  Amount 
 
 2011, thousand UAH 2012, thousand UAH 
Exemption from import duty 13098,3  10067,9  
Exemption from VAT on import of 
goods 265998,2  310985,1  
Exemption from VAT on supply of 
research results 17378,2  23661,7  
Exemption on land tax 45414,8  42314,0  
Exemption from corporate income 
tax 806723,9  854551,8  
 
Duration 
 
Until 1 January 2016. 
 Exemption from corporate income tax established for 10 years from 01.01.2011. 
 
Statistics for estimation of trade effects 
 
Production by industry* 2011, thousand 
UAH 2012, thousand UAH 
 12 075 701 12 921 000 
*	Total	production,	including	pr oduction	of	enterprises‐benefic iaries		
 
1.2.3  Machinery for agriculture 
Policy objective and/or purpose 
 
Creation of favourable economic conditions for increasing the production of agricultural machinery 
and equipment for the food processing industry , improving the system of ensuring domestic 
agriculture machinery and equipment  
Background and authority 
 
Support is provided in accordance with the Law of Ukraine "On the promotion of the domestic machinery for agriculture" of 07.02.2002 No. 3023-III,  and in accordance with the Law of Ukraine 
No. 2257-IV "On State Budget of Ukraine for 2011" (as amended) on 23 December 2010, the Law 
of Ukraine No. 4282-VI "On State Budget of Ukraine for 2012" (as amended) on 22 December 2011. 
Form 
 
Reimbursement of interest rates on loans 
 Partial (70%) compensation of the rate of the Nati onal Bank of Ukraine on bank credits granted to 
enterprises of domestic machinery for the manufacture of agricultural machinery and equipment for agriculture, and government support of banks that provide long-term financing of these 
enterprises; 
 Partial (40%) compensation by the state of the cost of agricultural machinery and equipment, 
supplied for agricultural producers and enterprises and for food and processing industry; 
 Loans to domestic agricultural machinery is carried out in order to provide loans on a general basis 
and as special treatment credit, which provides up to 70% discount rate of the National Bank of 
Ukraine on bank credits.  Exemption from corporate income tax 
 In accordance with paragraph 17 of subsection 4 of the Tax Code of Ukraine from 01.01.2011 for a 
period of 10 years agricultural machinery enterpri ses shall be exempt from corporate income tax. 
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  Exemption from import duty  
 
In accordance with subparagraph 8 of paragraph 4 of Section XXI "Transitional Provisions" of the Customs Code of Ukraine, temporar ily, until 1 January 2017, materials , components, devices 
and/or supplies are exempt from import duty for importation into the customs territory of Ukraine 
and placing into the customs regime of import if they are imported into the customs territory of 
Ukraine by national agricultural machinery enterpri ses (if such goods are not produced in Ukraine). 
Specified in this subparagraph goods exempt from tax provided that the goods are used for the 
production of taxable machinery and/or equipment for agriculture referred to in part 1 of Article 1 of the Law of Ukraine "On the promotion of the do mestic machinery for agriculture." Procedure for 
importation, the list of such enterprises and the list of products with the tariff codes are 
established by the Cabinet of Ministers of Ukraine.  In case of violation of the requirements for 
proper use of these goods taxpayer is required to pay import duty and interest in the manner and at the rates specified by law. 
 
Resolution of the Cabinet of Ministers of Ukrain e of 23 May 2012 No. 459 "On issues of importation 
into the customs territory of Ukraine of material s, parts, components and/or component parts for 
production machinery and/or equipment for agriculture". 
 Beneficiaries 
 
Agricultural machinery enterprises - residents in Ukraine that produce domestic machinery and 
equipment for agriculture, i.e. vehicles, machinery, equipment, technological complexes and lines are used in agriculture, food and processing industry for works on cultivation, harvesting, storage 
and processing of agricultural products. 
 Amount 
 
 2011 р., thousand UAH  2012 р., thousand UAH  
Reimbursement of interest rates 
on loans 0 
(allocated in the State 
budget - 60000)  0 
(not allocated in the State budget  
Exemption from corporate income 
tax No data  No data  
Exemption from import duty 0  0 
 
Duration 
Amount of support for privileged crediting is determined annually according to the State Budget. Exemption from corporate income tax established for 10 years from 01.01.2011. Exemption from import duties established until 1 January 2017. 
 
Statistics for estimation of trade effects 
 
Production by beneficiaries 2011 р., million UAH 2012 р., million UAH 
 
Agricultural machinery, tractors, seeders, harvesters 2011,01 1704,5 
 
1.2.4  Space industry 
Policy objective and/or purpose 
 
Support is intended to preserve and effectivel y employ the existing scientific, research, and 
production potential of Ukraine's space industry as a priority component of the high technology 
sector and to encourage investment as to ensure the future viability of the industry.  
Background and authority 
 
Preferential tax treatment for eligible enterprises in the space industry was provided for in the Law 
of Ukraine "On State Support of Space Activity" No. 1559-III of 16 March 2000.  
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  In 2011 and 2012 the support was provided according to the following regulations: 
 Law of Ukraine of 15.11.1996, No.502/96-VR "On Space Activities".  "Tax Code of Ukraine" dated 02.12.2010, No. 2755-VI.  "Customs Code of Ukraine" dated 13.03.2012, No. 4495-VI. 
 Resolution of the Cabinet of Ministers of  Ukraine of 29 December 2010 No. 1248 "On 
approval of the list of subjects of space acti vities that are exempt until 1 January 2015 from 
land tax for land for production purposes. 
 Resolution of the Cabinet of Ministers of Uk raine of 3 February 2010 No. 102 "On issues of 
importation into the customs territory of Ukraine goods within the international treaties (agreements) of Ukraine ratified by Verkhovna Rada of Ukraine on Space Activity as to 
creating space equipment without payment of import duties and value added tax". 
 
Form 
 
Exemption from VAT 
 
Pursuant to subparagraph 4 of paragraph 4 of Section XXI of the Customs Code of Ukraine and 
subparagraph "a" of paragraph 3 of subsection 2 of  section XX of the Tax Code of Ukraine during 
the validity of international treaties of Ukraine ratified by the Verkhovna Rada of Ukraine on Space Activity on creating space technology (includi ng the units, systems and components for space 
systems, space launch vehicles, spacecraft and ground segments of space systems) but not later 
than 1 January 2015, the following operations are exempt from paying value added tax: 
  import into the customs territory of Ukraine under the customs regime of import of goods 
referred to in subparagraph 4 of paragraph 4 of Section XXI "Transitional Provisions" of the 
Customs Code of Ukraine, within the limit values  set by the Cabinet of Ministers of Ukraine, 
provided proper use of such products in the production of space equipment (including the 
units, systems and components for space systems, space launch vehicles, spacecraft and 
ground segments of space systems) by the re sidents - entities of space activity, which 
received a licence for such activities and participate in the implementation of international agreements. List of such residents - entities of  space activity is set by the Central Executive 
Body to Public Policy in the Field of Space Activities. 
 The order and import volumes of the above prod ucts are governed by the Resolution of the 
Cabinet of Ministers of Ukraine of 3 February 2010 No. 102. 
 In case of infringement of proper use of the goods or exceeding limit values of imports established 
by the Cabinet of Ministers of Ukraine, the corresp onding entity of space activity, which effectively 
allowed the right to tax incentives, be deemed to have deliberately evaded tax and penalties applied to it (financial) sanctions in accordance with applicable law.  
Exemption from import duty  
 
In accordance with subparagraph 4 of paragraph 4 of Section XXI of the Customs Code of Ukraine, 
temporarily, until 1 January 2015, the followin g goods are exempt from import duty for 
importation into the customs territory of Ukraine and placing into the customs regime of import:  
those imported into the customs territory of Ukraine by residents - the entities of space activity, 
within the frame of ratified by the Verkhovna Rada  of Ukraine international treaties of Ukraine on 
Space Activity on production of space equipment (including the units, systems and components for space systems, space launch vehicles, spacecraft an d ground segments of space systems) by such 
HS (UKTZED) codes: 2818 10, 2830 90 85 00, 2837, 2901, 2903, 2921, 2929, 2931 00 95 90, 
3207 20, 3208, 3209, 3214, 3403, 3506, 3602 00 00 00, 3603 00, 3604, 3701, 3703, 3707, 3810, 
3814 00, 3901, 3903, 3906, 3907, 3908 90 00 00, 3909, 3911, 3917, 3919, 3920, 3921, 3926, 4002, 4005, 4008, 4016, 4017 00 10 00, 4823 40 00 00, 4901, 4906 00 00 00, 5208, 5407, 5607, 
5903, 5906, 5911 90 90, 6815 10, 6902, 7002, 7007 11 90 00, 7019, 7202, 7211, 7214, 7215, 
7217, 7219, 7220, 7222, 7223 00, 7224 - 7226, 7228, 7229, 7304, 7407, 7409 - 7411, 7413 00, 7505, 7506, 7508, 7601, 7604 - 7608, 7616, 8101, 8102, 8104, 8105, 8108, 8112, 8307, 8412, 
8414, 8421, 8471, 8473, 8479, 8482, 8483 30 80, 8501, 8504, 8506, 8507, 8517, 8523, 8526, G/SCM/N/253/UKR 
 
- 12 - 
 
  8529, 8532, 8533, 8536 - 8538, 8540 - 8544, 8547, 8803, 9014, 9015, 9023 00, 9026, 9027, 
9030 - 9032, 9033 00 00 00, 9306 90 10 00.   The Cabinet of Ministers approves the volume and procedure for import of such goods (Decree of 
the Cabinet of Ministries of 03.02.2010 No. 102).  
 Exemption from land tax 
 Pursuant to subsection 6. "Features levying land ta x» of the Tax Code of Ukraine during the action 
of the ratified by Verkhovna Rada of Ukraine international treaties (agreements) of Ukraine on Space Activity on production of space equipment (including the units, systems and components for 
space systems, space launch vehicles, spacecraft and ground segments of space systems), but not 
later than 1 January 2015, residents - the subjects of space activity, which received a licence for its implementation and participate in the implemen tation of such treaties (agreements), shall be 
exempted from land tax for use of land for producti on purposes. The list of the eligible residents - 
subjects of space activity is approved by the Reso lution of the Cabinet of Ministers of Ukraine of 
29 December 2010 No. 1248. 
 
Beneficiaries 
 The subjects of space activity - companies, institutions and organizations, including international 
and foreign, which according to the Law of Ukraine "On Space Activity" No. 502/96 of 
15 November 1996 (as amended), are engaged in space activities, such as scientific space 
research, development and application of  space equipment and use of space. 
 
Amount 
 
 2011 р., million UAH. 2012 р., million UAH 
Exemption from import duties 14,5 14,9 
Exemption from VAT on import 198,4 172,6 
Exemption from land tax 62,5 64,1 
 
Duration 
 
During validity of the international treaties of Ukraine on Space Activity on production of space 
equipment, until 1 January 2015.  
Statistics for estimation of trade effects 
 
Production of beneficiaries in 
comparative prices 2011 р., million UAH 2012 р., million UAH 
 3 604,9 4 314,4 
 
1.2.5  Coal Mining 
Policy objective and/or purpose 
 
To assist in restructuring and modernization in the coal mining sector, raising industrial safety, labour safety improvement.  
 
Background and authority 
 
In 2011, the state support for the coal mining indu stry was provided according to the Law on the 
State Budget of Ukraine for 2011 and regulations of the Cabinet of Ministers of Ukraine: 
  Resolution of the Cabinet of Ministers of Ukraine of 23 February 2011 No. 153 "On approval 
of the use of funds allocated in the state budget to offset the cost of coal mining enterprises, 
included in the cost of finish ed marketable coal products"; 
 
 Resolution of the Cabinet of Ministers of Ukraine of 9 March 2011 No. 226 "On approval of 
the use of funds provided in the state budget to support the construction of coal and peat 
mining enterprises"; G/SCM/N/253/UKR 
 
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 Resolution of the Cabinet of Ministers of Ukraine of 11 March 2011 No. 236 "On approval of 
the use of funds allocated in the state budget for restructuring of the coal and peat mining 
industry." 
 
 Resolution of the Cabinet of Ministers of Ukraine of 20 June 2011 No. 836 "On approval of 
the use of funds allocated in the state budget for technical modernization of coal and peat 
mining enterprises, including through the reduction of loans in 2010 - 2011 and 
implementation of the coal mining  equipment renovation program". 
 According to the Law of Ukraine of 23.10.2010 No. 2857-VI, it was foreseen in the State Budget of 
Ukraine for 2011: 
 
 support to the coal mining enterprises for partial refund of the expenses on production cost 
– 6 710 210,0 thousand UAH,  
 restructuring of coal industry including repaying past-due (previous years) debts on 
electricity (in sum 541000 thousand UAH). – 1 669 299,2 thousand UAH, 
 technical modernization of coal and peat mining enterprises, including through the 
reduction of loans in 2010 - 2011 and implementation of the coal mining equipment renovation program - 1908721,4 thousand UAH, 
 support to capital construction of objects of the coal mining and peat producing 
enterprises – 381 448,3 thousand UAH. 
 
In 2012, the state support for the coal mining indu stry was provided according to the Law on the 
State Budget of Ukraine for 2012 and regulations of the Cabinet of Ministers of Ukraine: 
  Resolution of the Cabinet of Ministers of Ukraine of 11 March 2011 No. 236 "On approval of 
the use of funds allocated in the state budget for restructuring of the coal and peat mining 
industry." 
  Resolution of the Cabinet of Ministers of Ukraine of 23 February 2011 No. 153 "On approval 
of the use of funds allocated in the state budget to offset the cost of coal mining enterprises, 
included in the cost of finish ed marketable coal products"; 
 
 Resolution of the Cabinet of Ministers of Uk raine of 2 April 2012 No. 286 "On approval of the 
use of funds provided in the state budget to support the construction of coal and peat 
mining enterprises and reduction of credit prices for their technical upgrading"; 
 
 Resolution of the Cabinet of Ministers of Ukraine of 8 October 2012 No. 988 "On approval of 
the use of funds allocated in the state budget to support the construction of coal and peat mining enterprises, their technological upgrading and implementation of coal mining 
equipment renovation program". 
 According to the Law of Ukraine of 22.12.11 No. 4282-VI, it was foreseen in the State Budget of 
Ukraine for 2012: 
 
 restructuring of coal industry (including brown coal mining enterprises) – 1 149 298,5 
thousand UAH, 
 support to the coal mining enterprises for partial refund of the expenses on production cost 
– 10 171 847,8 thousand UAH,  
 state support of the construction of coal and peat mining enterprises, their technological 
upgrading through reduction of credit prices and loan repayment as well as through 
implementation of coal mining equipment renovation program – 2 755 300,0 thousand 
UAH. 
Form 
 
Partial refund of production costs 
 The state coal mining enterprises (including brawn coal producers) use the budget money for labour payments and for compulsory payments, such as electricity and securing warranty obligations as to reimbursement of budgetary credits, received for discharge the salary 
indebtedness.  G/SCM/N/253/UKR 
 
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The funds are distributed between the state enterprises, which allocate the money on partial covering the expenses on production cost of their own coal products for 1 Hryvna cost of such a product, at the condition that the volume of the produced product (by the anticipated sale price) 
does not cover the cost of production.  
 The list of such enterprises is determined by th e Ministry of Energy and Mines on the basis of 
economic performance of companies and their plans for the year. 
 Restructuring of coal industry (granting funds for financing of liquidation of unprofitable mines) 
 
In accordance with the Decrees of the Cabi net of Ministers No. 236 of 18.03.2011 black coal, 
brown coal and peat producing enterprises use budg et funds for preparation to liquidation, for the 
liquidation, for repaying past-due (previous years) debts on electricity by state enterprises in the 
process of preparation to liquidation such as: 
 preparation of coal mining enterprises to liquidation (preparation for transfer or 
cancellation of reserves of coal and other minerals, mining, machinery and equipment that 
is not used during the work associated with the physical liquidation of coal enterprises; 
reducing the number of employees; the arrears of wages and social benefits to compensate for damage caused to the health of employees in the performance of job duties; free for domestic coal; receive land titles and ownership of land and the right of 
permanent land use; environment protection and preventing from dangerous effects of 
coal enterprises preparing for liquidation, at the existing companies, buildings, environment and human health); 
 liquidation of coal and peat mining enterprises (physical liquidation of these enterprises, 
environmental protection, safety of surveying existing businesses and surrounding areas to 
overcome the negative social and economic consequences of liquidation in accordance with 
the duly approved procedure of liquidation projects);  
 repayment of debts by companies that restructured for the electricity used in prior years;  
 maintenance of drainage facilities financing, construction and reconstruction of which is 
foreseen by the projects of mines liquidation,  provided that ensuring of their continued 
functioning is not included to the cost of such projects. 
 Beneficiaries 
 The program concerns black coal, brown coal and peat producing enterprises of state ownership what are preparing to liquidation and objects of enterprises, which are being liquidated. 
 
Funding for technical re-equipment of coal mines 
 In accordance with the Decrees of the Cabinet of Ministers of Ukraine of 20 June 2011 No. 836 and 
on 8 October 2012 No. 988, the budget for this prog ram is provided on a non-returnable basis. 
  Budget funds are used to improve the efficiency of mining enterprises machinery to meet the 
needs of branches of the national economy with high-quality coal and peat production and aimed 
at:  
1)  technical re-equipment of coal mines (treatment, tunnel faces and stationary technological 
systems); peat mining enterprises, including briquetting plants; 
2)  compensation of interest on loans to companies involved in the 2010 - 2011; 
3)  implementation of the mining equipment renovation program. 
 
The list of coal mines is Ministry of Energy and Mines by competitive selection procedure, which is set by the mentioned Ministry. 
 
Funding for the construction of coal and peat mining enterprises 
 
According to the Decrees of the Cabinet of Mini sters of Ukraine of March 9, 2011 No. 226, of 
2 April 2012 No. 286, of 8 October 2012 No. 988, the budget allocated to coal and peat mining enterprises on non-returnable basis. G/SCM/N/253/UKR 
 
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Budget funds are used to improve the efficiency of enterprises to meet the needs of industries in 
the required amount of coal and peat by the construction, reconstruction, technical re-equipment of enterprises that provide support, increase of their production capacity for the extraction and 
processing of coal and peat, improving working conditions and increasing safety, and aimed at: 
 
1)  implementation of capital construction projects; 
2)  compensation for interest on loans attracted for technical re-equipment; 
3)  technical upgrading of public peat mining enterprises. 
 Beneficiaries 
 The programs are applied to coal and peat producing enterprises of state ownership.  
Amount 
 
 2011, thousand UAH 2012, thousand UAH 
Partial refund of production costs 6 710 210,0 10 171 847,8 
Restructuring of coal and peat industry 1 600 313,6 1 078 240,7 
support of technical re-equipment 1 391 600,0 1 308 272,2 
support of capital construction 347 825,6  
 
Duration 
 
Is not determined, on the annual basis.  
 Statistics for estimation of trade effects 
 
Amount produced by the 
enterprises - beneficiaries 2011, thousand tons 2012, thousand tons 
Black coal  24 203,6 25 111,0 
Brown coal 0 0 
Peat 521,1 433,0 
 
1.2.6  Book-Publishing 
Policy objective and/or purpose 
 
Overcoming of the crisis in this sector and providing for development of Ukrainian book-publishing.  
 
Background and authority 
 
Support is provided by the Law of Ukraine "On St ate Support of Book-publishing in Ukraine" of 
6 March 2003, No. 601-IV (with changes and amendments) and the Law of Ukraine of 20 November 2003, No. 1300-IV and No. 521-VI of  18 September 2008 "On amendments to some 
laws of Ukraine concerning state support to book-publishing in Ukraine", Customs Code of Ukraine 
(the Law of Ukraine of 13.03.2012 No. 4495-VI), the Tax Code of Ukraine (the Law of Ukraine of 
02.12.2010 No. 2755 - VI).  
Form 
 
Exemption from import duties 
 Exemption applies to imports of products used for book-publishing (for example, paints, cellulose, polygraphic materials, equipment) that are not produced in Ukraine. The list of inputs to be exempted presented in subparagraph 1 of paragrap h 4 of Section XXI "Transitional Provisions" of 
the Customs Code of Ukraine. 
 Exemption from VAT on imports 
 The same as for import duties and also for oper ation on supply of these goods to publishing-
houses and publishing organisations, polygraphic enterprises on the territory of Ukraine. G/SCM/N/253/UKR 
 
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Exemption from VAT on domestic sales 
 Exemption applies to supply of services by business entities-residents of Ukraine which 
simultaneously conduct books-publishing activity and activity of production and distribution of 
books and production of paper and cardboard. Th e gross income of such business entity from 
mentioned activity should be not less 100% of its total gross income in the first reporting (fiscal) 
period from the time of its establishment or not less 50% of its total gross income in the previous 
reporting (fiscal) period.  The following operations are exempt from VAT:  
 
 performance and delivery of services in publishing, in activities on production and 
distribution by publishers, publishing organizati ons, printing businesses, distributors of book 
products manufactured in Ukraine, real produc tion and/or supply of paper and cardboard, 
produced in Ukraine for the production of book s, student notebooks, textbooks of domestic 
production as well as and operation on supply of books produced in Ukraine, except for 
advertising, services on placement of advertising and erotic materials and advertising and 
erotic publications. 
 Exemption from Corporate Income Tax 
 Exempted income of publishing-houses and publis hing organisations, polygraphic enterprises, 
received from publishing activity in Ukraine, exempt publishing materials of erotic nature.  
 
Beneficiaries 
 
Publishing-houses and publishing organisations, po lygraphic enterprises and distributors of books-
publishing production which conducting their activity in accordance with the Law of Ukraine "On publishing" No. 318/97-VR of 5 June 1997 (with changes and amendments).   
Amount 
 
 2011, million UAH 2012, thousand UAH 
Exemption from Corporate Income Tax 0,3 0,3 
Exemption from import duties - - 
Exemption from VAT on imports - - 
Exemption from VAT on domestic sales  4,1 4,7 
 
Duration 
 From 1 January 2004 till 1 January 2015.    Statistic for estimation of trade effects 
 
Production  2011  2012  
Number of titles of books and 
brochures, published items 410 423 
Annual Edition, thousands items 1218,5 1315,2 
 
 
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