WORLD TRADE  
ORGANIZATION  G/SCM/N/155/UKR 
26 May 2008 
 (08-2428) 
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 15 May 2008, is being circulated at the request of the 
Delegation of Ukraine.   
 
_______________ 
 
 G/SCM/N/155/UKR 
Page 2  
 
  TABLE OF CONTENTS 
 
  Page
 
 
INTRODUCTION................................................................................................................... ...............3  
I. PART I.  HORIZONTAL PROGRAMMES..........................................................................4  
1. Special Economic Zones a nd Priority T erritories..................................................................4  
2. Technological Parks............................................................................................................ ....17  
3. Aid to innovation and investment projects by means of credit support ............................19  
4. Realization of advanced energy-saving technologies and alternative fuel sources 
production technologies........................................................................................................ ..20 
II. PART II.  SECTORAL PROGRAMMES............................................................................22  
1. Shipbuilding ................................................................................................................... .........23  
2. Automotive Sector.............................................................................................................. .....25  
3. Aircraft ....................................................................................................................... .............28  
4. Space Industry................................................................................................................. ........30  
5. Coal Mining.................................................................................................................... .........33  
6. Book-Publishing ................................................................................................................ ......37  
  G/SCM/N/155/UKR 
 Page 3 
 
 
  INTRODUCTION 
 This notification was prepared in accord ance with notification commitment in the 
paragraph 276 of the Working Party Report on the accession of Ukraine (WT/ACC/UKR/152, 
25 January 2008) and pursuant to Article XVI:1 of the GATT 1994 and Article 25 of the Agreement 
on Subsidies and Countervailing Measures.   
 
 In preparing this notification, Ukraine has attempted to achieve the maximum transparency 
with regard to aid and support measures granted w ithin its territory.  In accordance with Article 25.7 
of the Subsidies Agreement, the fact that such aid has been notified does neither prejudge its legal 
status under GATT 1994 or this Agreement, nor pr ejudge its effects under the Agreement or the 
nature of the measure itself .   
 
This notification relates to subsidies granted during the period 2005 , 2006  and 2007  and to 
subsidy programmes which are currently in force, a nd provides statistical information at least up to 
the end of 2007 .   
 
 In preparing this notification, Ukraine has taken into account applicable "General Rules" 
listed in G/SCM/6/Rev.1.   G/SCM/N/155/UKR 
Page 4  
 
  I. PART I.  HORIZONTAL PROGRAMMES 
1. Special Economic Zones and Priority Territories 
 Policy objective and/or purpose
 
 Eleven "Special Economic Zones" (also descr ibed as "Free Economic Zones" or FEZs) and 
nine "Priority Territories with Special Investment Re gimes" have been established.  They are intended 
to encourage investment, both domestic and foreign,  in geographically defined depressed regions to 
offset:    
- Structural unemployment resulting from decommissioning of uneconomic coal mines 
(Donetsk, Lugansk and Volyn Oblasts);  and 
- Structural unemployment resulting from closur e of military production complexes (Kharkiv 
and Shostka).   
  Economic and social impact of:    
- Accident at Chernobyl NPP (Slavutych and districts and cities in Zhytomyr and Chernihiv 
oblasts);   
- Contamination by sulphur DGHP Mining and Chemical Mills (Yavoriv district of L'viv 
oblast);  and 
- Flooding in Carpathian region.   
 
 In addition, special investment regime has been established in the Autonomous Republic of 
Crimea aimed at encouraging investments in public  health protection, recreation and tourism sectors, 
preservation and efficient management of available recreation resources, also at industrial production 
development in the peninsula.    
 Assistance programs available in a zone or speci al territory are particular to that zone or 
territory.     Background and authority
 
  The basic enabling authority to establish Special Zones and Priority Territories is contained 
in:   
 
- Law of Ukraine "On General Principles of Cr eation and Functioning of Special (Free) 
Economic Zones" of 13 October 1992 (with ch anges and amendments) No. 2673-XIII/92.   
 
 Each of eleven zones and nine Priority Territori es is established under a particular statute:   
  Zones
 
 
Location Duration and date 
established Legislative basis 
Donetsk, Donetsk 
Oblast 60 years from 
21 July 1998 Law of Ukraine No. 356 dated 24 December 1998 
"On the Special Economic Zone and Special Regime of investment activities in Donetsk 
Oblast".    G/SCM/N/155/UKR 
 Page 5 
 
 
  Location Duration and date 
established Legislative basis 
Mariupol, Donetsk 
Oblast 60 years from 
21 July 1998 Law of Ukraine No. 356 dated 24 December 1998 
"On the Special Economic Zone and Special 
Regime of investment activities in Donetsk Oblast".   
Uzhgorodskiy and Mukachevskiy raions, Zakarpatska Oblast 30 years from 
9 January 1999 Law of Ukraine No. 2322 dated 22 March 2001 
"On the Special Economic Zone 'Zakarpattia'".   
Yavorivskiy Raion, Lviv Oblast 20 years from 
17 February 1999 Law of Ukraine No. 402 dated 15 January 1999 
"On the Special Economic Zone 'Yavoriv'" 
Kovel, Volyn Oblast 20 years from 
1 January 2000 President of Ukraine Decree No. 702 dated 
22 June 1999 "On the Special Economic zone 
'Interport-Kovel'".   
Mykolaiv (on the territory of ship-building enterprises) 30 years from 
1 January 2000 Law of Ukraine No. 1909 dated 13 July 2000 "On 
the Special Economic Zone 'Mykolaiv'", Decree of the Cabinet of Ministries of Ukraine No. 1175 of 26 July 2000 approving the list of priority economic activities on the territories of priority development in Zhytomyr Oblast, Chernigiv 
Oblast, in the City of Shostka, Sumy Oblast and 
territory of special economic zone "Mykolayv".   
Odesa (on the Territory of the Odesa Sea Trade Port) 25 years from 
1 January 2000 Law of Ukraine No. 1607 dated 23 March 2000 
"On the Special (Free) Economic Zone 'Porto Franco' on the Territory of the Odesa Sea Trade Port".    
Reni, Odesa Oblast 30 years from 
17 May 2000 Law of Ukraine No. 1605 dated 23 March 2000 
"On the Special Economic Zone 'Reni'".   
Kerch, Autonomous Republic of Crimea 30 years from 
1 January 2000 Law of Ukraine No. 2189-III of 
21 December 2000 "On a Special Regime of 
Investment Activity at Territories of Priority 
Development and the Special Economic Zone 'Port Krym' in the Autonomous Republic of Crimea".   
Slavutych, Kyiv Oblast 20 years from 
30 July 1998 Law of Ukraine No. 721 dated 3 June 1999 "On 
the Special Economic Zone 'Slavutych'".   
Kurortopolis Truskavets, Lviv Oblast 20 years from 
1 January 2000 Law of Ukraine No. 514 dated 18 March 1999 
"On the Special Economic Zone for Tourism and Recreation 'Kurortopolis Truskavets'".   
  
  G/SCM/N/155/UKR 
Page 6  
Priority Territories  
 
Special regime of investment 
activity on the territories of 
priority economic 
development in Donetsk 
Oblast Cities of Artemivsk, Vehledar, Horlivka, Dzerzhynsk, 
Dymytrov, Dobropillia, Donetsk, Yenakiyeve, Zhdanivka, 
Kirovske, Kostiantynivka, Kramatorsk, Krasnoarmiysk, 
Krasnyi Lyman, Makiyivka, Mariupol, Novohrodivka, 
Selidove, Sloviansk, Snizhne , Torez, Shakhtarsk, 
Druzhkivka, Khartcysk, Zugres, Illovaysk as well as the 
Amvroziyivskiy, Volnovaskiy, Kostyantynivsk, Marianskiy 
and Slovanskiy, Starobeshivskiy  and Shahtarskiy raions.   30 years from 
21 July 1998 - Law of Ukraine No. 356 dated 24 December 1998 "On Special 
Economic Zones and Special Regime  of Investment Activity in 
Donetsk Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 1255 of 
11 August 2000 approving the list of priority economic 
activities on the territories of priority development in Donetsk 
Oblast;   
- Decree of the Cabinet of Ministries of Ukraine No1065 of 
18 June 1999 approving the Procedure of consideration of 
investment projects that are bein g realized in priority economic 
activities on territories of pr iority development in Donetsk 
Oblast.   
Special regime of investment activity on the territories of 
priority economic 
development in Luhansk 
Oblast Cities of Brianka, Krasnodon, Sverdlovsk, Pervomaisk, 
Stakhaniv, Krasniy Luch, as well as the Antr аtsytivskiy, 
Kreminskiy and Krasnodonskiy raions.   30 years from 
2 February 1999 - Law of Ukraine No. 970 dated 15 July 1999 "On the Special 
Regime of Investment  Activity in Territories of Priority 
Development in Luhansk Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 1968 of 
25 October 1999 "On approving of the list of priority economic 
activities in the territory of pr iority economic development in 
Luhansk Oblast and of the Procedure of consideration of 
investment projects that are bein g realized in priority economic 
activities on territories of pr iority development in Luhansk 
Oblast".   
Special regime of investment 
activity in Zakarpatska 
Oblast All of Zakarpatska Oblast.   15 years from 
29 January 1999 - Law of Ukraine No. 357 dated 24 December 1998 "On a Special 
Regime of Investment  Activity in Zakarpatska Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 548 of 
6 April 1999 "On approving of the list of priority economic 
activities in the territory of Zakarpatska Oblast to which the 
Special regime of investment  activity is applied".   
Special regime of investment 
activity on territories of 
priority development in the 
autonomous Republic of 
Crimea Cities of Yalta, Alushta,  Sudak, Feodosia, Kerch, 
Krasnoperekopsk, Armiansk; Krasnoperekopskiy and 
Leninskiy raions.   30 years from 
1 January 2000 - Law of Ukraine No. 2189-III of 21 December 2000 "On a 
Special Regime of Investment Activ ity at Territories of Priority 
Development and the Special Ec onomic Zone 'Port Crimea' in 
the Autonomous Republic  of Crimea";   
- Decree of the Cabinet of Ministries of Ukraine No. 212-r of 
23 May 2001 "On approval of the Procedure of consideration of 
investment projects that are bein g realized in priority economic 
activities on territories of priority development and in the SEZ 
'Port Crimea' in the autonomous Republic of Crimea, and of the 
list of priority economic activit ies in the territory of the 
autonomous Republic of Crimea, to  which the Special regime of 
investment activity is applied".    
   G/SCM/N/155/UKR
 Page 7Special regime of investment 
activity in the City of 
Shostka, Sumy Oblast Shostka, Sumy Oblast.   30 years from 
1 January 2000 - Law of Ukraine No. 1251 of 18 November 2003 "On the Special 
Regime of Investment Activity in the City of Shostka of Sumy 
Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 1175 of 
26 July 2000 approving the list of priority economic activities 
on the territories of priority development in Zhytomyr Oblast, 
Chernigiv Oblast, in the City of Shostka, Sumy Oblast and 
territory of special economic zone "Mykolayv";   
- Decree of the Cabinet of Ministries of Ukraine No. 1552 of 
12 October 2000 "On approval of the Procedure of consideration 
of investment projects which are being realized in the priority 
economic activities on the territory of the City of Shostka, Sumy 
Oblast".   
Special regime of investment activity on territories of 
priority development in 
Zhytomyr Oblast Korostenskiy, Novohrad-Volynskiy, Luhynskiy, 
Narodytskiy, Ovrutskiy, Olevskiy, Malynivskiy, 
Yemilchynskiy, Volodarsko-Voly nskiy raions and the cities 
of Berdychiv, Korosten, Novohrad-Volynskiy.   30 years from 
1 January 2000 - Law of Ukraine No. 1276 dated 3 December 1999 "On the 
Special Regime of Investment Activ ity on Territories of Priority 
Development in Zhytomyr Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 1205 of 
3 August 2000 "On approval of the Procedure of consideration 
of investment projects that ar e being realized in priority 
economic activities on territories of priority development in 
Zhytomyr Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 1175 of 
26 July 2000 approving the list of priority economic activities 
on the territories of priority development in Zhytomyr Oblast, 
Chernigiv Oblast, in the City of Shostka, Sumy Oblast and 
territory of special economic zone "Mykolayv".   
Special regime of investment 
activity on the territory of 
the city of Kharkiv Kharkiv.   30 years from 
1 January 2000 - Law of Ukraine No. 1714 dated 11 May 2000 "On the Special 
Regime of Investment Activity on the Territory of the City of 
Kharkiv";   
- Decree of the Cabinet of Ministries of Ukraine No. 2076 of 
11 November 1999 "On approving of the List of priority 
economic activities on territory of the city of Kharkiv to which 
special regime of investment ac tivity is applied, and of the 
Procedure of consideration of inve stment projects that are being 
realized by the subjects of business activity on territory of the 
city of Kharkiv".    
  G/SCM/N/155/UKR 
Page 8 
Special regime of investment 
activity on territories of 
priority development in 
Chernihiv Oblast Horodnianskiy, Koriukivskiy, Novhorod-Siverskiy, 
Semenivskiy, Ripkinskiy, Cherni hivskiy, Shchorskiy raions.  30 years from 
1 January 2000 - Law of Ukraine No. 1250 of 18 November 2003 "On the Special 
Regime of Investment  Activity in Territories of Priority 
Development in Chernihiv Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 1206 of 
3 August 2000 "On approving of the Procedure of consideration 
of investment projects that ar e realizing in priority economic 
activities on territories of priority development in Chernihiv 
Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 1175 of 
26 July 2000 approving the list of priority economic activities 
on the territories of priority development in Zhytomyr Oblast, 
Chernigiv Oblast, in the City of Shostka, Sumy Oblast and 
territory of special economic zone "Mykolayv".   
Special regime of investment activity on territories of 
priority development in 
Volyn Oblast Novovolynsk, Volyn Oblast.   30 years from 
1 January 2000 - Law of Ukraine No. 2354 of 5 April 2001 "On the Special 
Regime of Investment  Activity on Territories of Priority 
Development in Volyn Oblast";   
- Decree of the Cabinet of Ministries of Ukraine No. 2210 of 
6 December 1999 "On approving of the List of priority 
economic activities on territories of priority development in 
Volyn Oblast and of the Procedure of consideration of 
investment projects that are bein g realized in priority economic 
activities on territories of priority development in Volyn 
Oblast".   
 G/SCM/N/155/UKR 
Page 9 
 
 
   Incentives offered in the form of import duty a nd internal tax exemptions and deferrals are 
inscribed in the relevant tax laws:     Corporate Income Tax:    
− Law of Ukraine "On Corporate Income Ta x" as of 28 December 1994 No. 334/94-VR 
(with changes and amendments).   
  Land Tax:    
− Law of Ukraine "On Land Tax" as of 3 July 1992 No. 2535-XII (with changes and 
amendments).   
 
 Import duties:    
− Law of Ukraine "On Common Customs Tariff" 5 February 1992 No. 2097-XII (with 
changes and amendments);  and 
− Law of Ukraine "On Customs Tariff of Uk raine" as of 5 April 2001 No. 2371-III (with 
changes and amendments).   
 
 VAT:    
− Law of Ukraine "On Value Added Tax" as of  3 April 1997 No. 168/97 (with changes and 
amendments) 
  On adoption of the Law of Ukraine as of 25 March 2005 No. 2505 "On amendments to the Law of Ukraine "On the State Budget of Ukra ine for 2005" and some other legislative acts 
of Ukraine" the tax privileges and spec ial customs regime were cancelled.   
  Currently the investment projects in SEZ and Priority Territories are implemented 
under the regular tax regime .  Some tax privileges were granted in 2006 and 2007 to some 
enterprises in the SEZ "Donetsk" and Priority Territori es in Donetsk oblast by judgement of courts.   
 
 Form
 
  The enterprises locating in zones or priority territories benefited from a number of assistance 
programs mainly in the form of exemptions or reducti ons in direct and indirect taxes.  Programs vary 
as between individual zones and territories and are summarized below:     Zones
 
 
Name of 
FEZ/Form 
of 
Assistance Special 
Customs 
Zone 
Regime Exemption 
from income 
tax Exemption 
from 
taxation of 
investments Exemption 
from 
Import 
Duty and 
VAT Exemption from 
land tax 
Azov + rate – 20% + - + (for duration of site 
preparation) 
Donetsk + rate – 20% + - + (for duration of site 
preparation) 
Zakarpattia + rate – 20% - - - G/SCM/N/155/UKR 
Page 10  
 
  Name of 
FEZ/Form 
of 
Assistance Special 
Customs 
Zone 
Regime Exemption 
from income 
tax Exemption 
from 
taxation of 
investments Exemption 
from 
Import 
Duty and 
VAT Exemption from 
land tax 
Yavoriv, 
including 
Krakovets Autoport + (only for 
Krakovets 
Autoport) + (5 years), 
next -50% - + (5 years) + (3 years), next -50% 
of existing rate 
Slavutych - + (3 years), 
from Year 4 
to year 6 -
50% of 
existing rate + + (5 years) + (3 years), Year 4 to 
Year 6 -50% of 
existing rate 
Kurotopolis 
Truskavets - + (3 years), 
from Year 4 
to Year 6 -
50% of 
existing rate + 
 + 
 + (for duration of site 
preparation), next 
10 years - 50% of 
existing rate 
Porto-Franco + +(3 years), 
from Year 4 
to Year 6 - 
50% of 
existing rate + - - 
Reni + rate – 20% + - - 
Port Krym + rate – 20% + - + (5 years) 
Interport 
Kovel + rate – 20% - - + (5 years) 
Mykolaiv + (ship-
building 
dock 
territory 
only) + (3 years), 
from Year 4 
to Year 6 - 
50% of the 
existing rate, 
from Year 4 
to 10 years -
reinvestment + + (5 years) + (5 years) 
 
 Priority Territories  
 
Name of 
territory Exemption from 
income tax Exemption 
from 
taxation of 
investments Exemption 
from 
payment of 
import 
duty and 
VAT Exemption from 
payment for land 
Donetsk Oblast + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) - 
Luhansk 
Oblast + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) + (5 years)  G/SCM/N/155/UKR 
 Page 11 
 
 
  Name of 
territory Exemption from 
income tax Exemption 
from 
taxation of 
investments Exemption 
from 
payment of 
import 
duty and 
VAT Exemption from 
payment for land 
Zakarpatska Oblast + (2 years) Year 3 to 
Year 5 - 50% of existing 
rate + + (5 years) - 
Autonomous 
Republic of Crimea + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) + (5 years) 
City of 
Shostka, Sumy Oblast + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) + (5 years) 
Zhytomyr 
Oblast + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) + (5 years) 
Kharkiv City + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) + (5 years) 
Chernihiv 
Oblast + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) + (5 years) 
Volyn Oblast + (3 years) Year 4 to 
Year 6 - 50% of existing 
rate + + (5 years) - 
 
Notes:    + = benefit program applies for the full duration of the zone/territory as set out in the basic 
legislation.   
 + (number of years) = benefit program applies only to the initial period of the years shown.   
 - = enterprises in the zone/territory are no t eligible for the benefit program shown.   
  Explanation of Benefits
 
  There follows an explanation of the benefits which were available for enterprises investing in 
zones/priority territories as indicat ed in the preceding tables.   
 
- Special Customs Zone Regime (Zones only) 
 Enterprises investing in a zone where there was a Special Customs Zone Regime benefited 
from certain tax exemptions at the time of transactions (see the table below).   
Transaction VAT Excise Duty Custom Duty 
(Import or Export) 
Importation of goods (excluding excisable goods) outside customs territory of Ukraine on the territory of SCZ Not Applied  Not Applied G/SCM/N/155/UKR 
Page 12  
 
  Importation to the customs territory 
of Ukraine of goods from the territory of SCZ Applied Applied Applied 
Importation to the customs territory 
of Ukraine of goods from the territory of SCZ that were 
manufactured or processed in 
the SCZ Applied Applied Not 
Applied* Applied 
Exportation from the SCZ territory 
outside customs territory of Ukraine of goods that were manufactured or processed in the SCZ Zero Rate Not Applied Not Applied 
Exportation from the SCZ territory 
outside customs territory of Ukraine of goods that were imported to SCZ 
from outside customs territory of 
Ukraine Not Applied Not Applied Not Applied 
Exportation of goods (excluding 
excisable goods) from the custom territory of Ukraine to SCZ territory Zero Rate  Not Applied 
* Only to SEZs "Azov", "Donetsk", "Zakarpattia" and "Interport Kovel". 
 
 In case of transit the usual customs charges ar e applied according to Ukrainian legislation.  
And in all other cases import duties and taxes are app lied as usual according to Ukrainian legislation.   
 
 Exemption from income tax  
  Enterprises investing in a zone or territory en joy a short-term tax holiday.  According to the 
regime applicable to the specific zone or territo ry (see tables), enterprises were exempted from it for 
an initial period and then were liable for th e tax at a reduced (50 per cent) rate.   
 
 Exemption from taxation of investments
 
  Sum of investments was excluded from the gr oss revenue of enterp rise for the aim of 
taxation.    
 Exemption from payment of import duties
 
  Enterprises with the status of  a zone/territory subject were entitled to import free of import 
duty foreign origin equipment as well as materials a nd parts used as inputs.  In some zones and all 
territories this exemption is of limited duration (fi ve years).  State authorities had drawn up lists and 
defined amounts of imported equipment, materials and pa rts eligible for this special tax treatment (this 
list with amounts is integral part of an investment project).  This preferential regime did not apply to 
excisable goods.     For some zones (see table above) products of a zone entering the customs territory of Ukraine 
were charged no duty and were exempted from paym ent of import duties on imported material and 
other inputs provided the product is deemed a zone  product in accordance with Ukraine's standard 
rules of origin.  Generally, zone origin is established when:    
− products created by processing in the zone are classified differently (at the level of any 
first four digits of H.S. code) from the imported materials and parts used;  and/or   G/SCM/N/155/UKR 
 Page 13 
 
 
  − value added in the zone is at least 50 per cent of the declared value of the final product.   
  Exemption from payment of VAT
 
  Enterprises with the status of a zone/territory  subject were exempted from payment of VAT 
on same products (and for the same periods) that customs duties exemptions applied.  The SEZ 
enterprises were also exempted from payment of VAT (zero rate) on the same products of domestic 
origin.  This preferential regime did not apply to excisable goods.     Zone products entering the customs territory of Ukraine, are liable to full payment of internal 
taxes (VAT and excise) on the full value of the final product.   
 
 Exemption from land tax
 
  Enterprises investing in a zone or priority te rritory where the exemption applies were either 
exempted from the standard land tax or were liable to it at a reduced rate in accordance with the 
regime indicated in the tables under "Form" above.   
  Beneficiaries
 
  Enterprises of any sector (excluding gambling business) may invest in a zone or priority territory.  Individual zone manage ment, in consultation with the na tional Government, had drawn up 
lists of business activities eligible for zone status.  A similar proce ss is undertaken by local authorities 
responsible for managing priority territories.  Su ch eligibility lists, which reflect local resource 
endowment and available labour skills, are then incor porated in the national legislation (see reference 
to relevant Decrees of the Cabinet of Minister s of Ukraine in the "Background and Authorities" 
tables).   
 
 In most zones and territories, investing ente rprises are required to be legal persons.  An 
enterprise's investment in a zone/territory is appr oved by a managing body established for the zone or 
the relevant local authority responsible for the priori ty territory in case after expertise it is accepted by 
the central government authorities.  Approval cond itions include compliance w ith the zone/territory's 
programs of development as well as programs of eco nomic, technological and social development set 
by the state.   
  In some zones and all territories minimum leve ls of investment have been established:   
 
SEZ Investment Project Cost 
Reni At least US$ 200,000 
Porto-franco at Odessa 
Commercial sea Port At least US$ 1 million 
Slavutych At least US$ 200,000 
Port Crimea At least US$ 100,000 
Mykolayiv At least:   
 US$ 500,000 – in food-processi ng and agricultural produce 
processing industries;   US$ 700,000 – in construction, energy and transport;   US$ 1 million – in machine building and instrument building; 
US$ 3 million – in shipbuilding industries 
Yavoriv At least US$ 500,000 (excluding projects of technological 
park) G/SCM/N/155/UKR 
Page 14  
 
  SEZ Investment Project Cost 
Priority Territories in 
Chernihiv Oblast At least: 
 US$ 200,000 – in agricu lture, food-processing and 
agricultural produce processing industries, light industry, 
pulp and paper industry, wood processing, furniture production, health protection and education;   US$ 300,000 – in construction, tourist and recreation industry 
US$ 500,000 – in extractive industry, machine and 
equipment building, non-metal mineral products, chemical production, transport 
Volyn Oblast At least US$ 200,000 – in all priority business activities 
The city of Kharkiv At least: 
 US$ 3 million – in metallurgy and metal working, machine and equipment building, building of electrical, electronic and transport equipment; 
US$ 1 million – in producing of electricity, gas, water, coke, 
other non-metal mineral products, in transport, communications, in metal waste and scrap working.  US$ 700,000 – in construction,  sanitation, scavenging and 
waste working, in chemical production, furniture, pulp and 
paper industry, printing industry; 
US$ 500,000 – in food-processi ng and agricultural products 
processing industry, textile and clothing industry, tanning and shoe manufacturing industry, in health protection and 
education, in public assistance and in research and 
development in natural and technical sciences. 
Zhytomyr Oblast At least: 
 
US$ 200,000 – in agriculture , food-processing industry, 
textile industry, pulp and pape r industry, wood processing, 
furniture production, clothes and furs manufacturing, health protection and education; 
US$ 300,000 – in construction 
US$ 500,000 – in extractive industry, machine and equipment building, mineral material products, chemical production, transport. 
the City of Shostka, Sumy Oblast At least: 
 US$ 200,000 – in food-processi ng industry and agricultural 
products processing, wood processing and wood working, 
health protection; US$ 500,000 – in construction, waste working, producing electricity by thermoelectric power station and in distribution of heat; US$ 1 million – in machine and equipment building, powder 
metallurgy and chemical production.  G/SCM/N/155/UKR 
 Page 15 
 
 
  SEZ Investment Project Cost 
Autonomous Republic of 
Crimea At least: 
 
US$ 100,000 – in activity for protection of historical and 
natural resources, research and development of information infrastructure, culture and sport, consumer services, territory cleaning, forestry, production of sport and fancy goods, toys, souvenirs; 
US$ 200,000 – in health protection and public assistance, in 
agriculture, fish industry, food-processing and agricultural produce processing industries, textile industry, wood working, furniture production; US$ 500,000 – in activity of health and resort centres, hotel 
and restaurant business, tran sport and communications, in 
construction, waste working, tourism services, rest and entertainment services. US$ 1 million – in extractive industry, processing industry, electricity, gas and water production. 
Zakarpatska Oblast At least US$ 200,000 – in all priority business activities 
Luhansk Oblast At least: 
 US$ 500,000 – in agricu lture, food-processing and 
agricultural produce processing indu stries, health protection; 
US$ 700,000 – in construction and transport industry; US$ 1 million – in extractive industry, electrical energy and coke production, chemical production and machine building. 
Donetsk Oblast At least: 
 US$ 1 million (US$ 250,000 – for small enterprises) – in all 
priority business activities 
 
 Once approved, the investment is registered a nd the investing enterprise enjoys the status of 
zone subject.  The enterprise enters into a contract ual agreement with the zone's/territory's managing 
authority in accordance with a Model Agreement given in Resolution No. 1199 of the Cabinet of 
Ministers of Ukraine of 5 July 1999 (with changes and amendments).   G/SCM/N/155/UKR 
Page 16  
 
   Amount
 
  Exemption from income tax
 
 
Year SEZ, million UAH Priority  Territories, million UAH 
2005 1,18 2,8 
2006 0.0 0.0 
2007 1,5 12,2 
 
 Exemption from import duties  
 
Year SEZ, million UAH Priority  Territories, million UAH 
2005 294,1 1 321,4 
2006 741,7 385,8 
2007 371,8 770,3 
 
 Exemption from VAT  
 
Year SEZ, million UAH Priority  Territories, million UAH 
2005 146,9 67,3 
2006 194,7 0.0 
2007 94,4 0.0 
 
 Exemption from Land Tax  
 
Year SEZ, million UAH Priority  Territories, million UAH 
2005 5,1 0,085 
2006 0.0 0.0 
2007 0.0 0.0 
 
 Duration  
  For the duration of the benefits in zones a nd priority territories, see the above Tables under 
"Background and Authorities".    
 On adoption of the Law of Ukraine as of 25  March 2005 No. 2505 "On Amendments to the 
Law of Ukraine "On the State Budget of Ukraine for 2005" and some other legislative acts of Ukraine" tax privileges and special customs regime were cancelled.    
 Currently the investment projects in SEZ and Priority Territories are implemented 
under regular tax regime .  Some tax privileges were granted in 2006 and 2007 to some enterprises 
in the SEZ "Donetsk" and Priority Territories in Donetsk oblast by judgement of courts.   
  Trade effects
 
  It is not possible to estimate what, if any,  trade effects may result from the use of the 
programs described.    G/SCM/N/155/UKR 
 Page 17 
 
 
  2. Technological Parks 
 Policy objective and/or purpose  
  Encourage investment, promotion of resear ch 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 othe r 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 Innovation 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 Procedure of C onsideration 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 Ukra ine of 23 November 2006 No. 1643 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 Uk raine of 21 March 2007 No. 517 approving the 
procedure of control and monitoring of the technological parks projects implementation;   
- Decree of the Cabinet of Ministers of Ukraine of 29 November 2006 No. 1657 approving 
procedure for state registration of technological parks;   
- Decree of the Cabinet of Ministers of Ukra ine of 1 March 2007 No. 329 (with changes and 
amendments) approving order for allocation of funds foreseen in the State budget in 2007 for 
financial support of innovation and investment projects.   
 
 Incentives offered in the form of import duty and internal tax exemptions are reflected in the 
relevant tax laws.     Corporate Income Tax  
- Law of Ukraine "On Corporate Income Tax" as of 28 December 1994 No. 334/94-VR (with 
changes and amendments).   
  Import duties  
- Law of Ukraine "On Common Customs Tariff" of 5 February 1992 No. 2097-XII (with 
changes and amendments);  and 
- Law of Ukraine "On Customs Tariff of Ukraine"  of 5 April 2001 No. 2371-III (with changes 
and amendments).   
 
VAT 
 
- Law of Ukraine "On Value Added Tax" of 3 April 1997 No. 168/97 (with changes and 
amendments).   
 G/SCM/N/155/UKR 
Page 18  
 
   Form
 
  Tax exemptions/deferral and credits support.     Explanation of Benefits
 
 
 Exemption from income tax.     Sums of income tax are accumulated on a speci al account and used for science, scientific and 
technical activity, development of the park's scien tific and technological and research and exploratory 
development basis only.   
  VAT payment deferral:     The promissory note for 720 calendar days is  used for tax obligations while importing new 
equipment and parts and for 180 calendar days wh ile importing materials which are not produced in 
Ukraine (in both cases).  The period is calculated from the day when the promissory note is given to 
the customs authority.     Exemption from payment of import duties:  
 New materials, equipment, component parts used as inputs in projects could be imported 
duty-free if they are not produced in Ukraine.     Credit support  
 Since 2006 each year the State Budget of Ukraine foresees certain budget for:   
  Full or partial (up to 50 per cent) credits 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 & credit ins titutions for credits for park's projects.   
  Beneficiaries
 
  Beneficiaries of the favourable regime are t echnological parks, their participants and joint 
enterprises implementing innovative projects in priority areas.   
  Technological park – is a legal person or associ ation 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 Developmen t" of 11 July 2001 No. 2623-III, Law of Ukraine 
"On Priorities of Innovative Activity in Ukraine" of 16 January 2003 No. 433-IV, considered by the 
Presidium of the National Academy of Science an d approved by the central government authority 
responsible for science issues.    G/SCM/N/155/UKR 
 Page 19 
 
 
   Amount  
 
 2005 р., 
million UAH. 2006 р., 
million UAH 2007 р., 
million UAH 
Exemption from income tax (usage of sums of income tax that are 
accumulated on a special accounts of 
parks and projects) 55,5 74,7 43,2 
Credit support (Full or partial 
compensation of interest paid by park's project implementation authority to commercial banks and other finance & credit institutions for credits) Not applied 0 30,0 
Exemption from payment of import 
duties 3,2 3,3 2,5 
 
 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.    3. Aid to innovation and investment projects by means of credit support 
 Policy objective and/or purpose
 
  To encourage investments, research and new technology development.   
 
 Background and authority
 
 
The Law No. 489-V of 19 December 2006 "On the State Budget of Ukraine for 2007" 
provides for this purpose a sum of 144500,0 thousand gryvnas.    
The procedure of use of such allocations from the State Budget is determined by the Cabinet 
of Ministers of Ukraine.    
Decree of the Cabinet of Ministries of Ukrain e No. 329 of 1 March 2007 "On approval of the 
Order of application of funds provided in the State budget 2007 for financial support of innovation 
and investment projects".   
  Form
 
  Credit support
 
 
 Support was by partial compensation of the interest paid to commercial banks for the 
provided credits.  Compensation must not exceed  double discount rate of the National Bank of 
Ukraine at the date of interest calculation.    G/SCM/N/155/UKR 
Page 20  
 
   The following criteria should be taken into consideration while evaluating projects for 
obtaining compensation:    
• Technological or scientific and technical leve l of project (for investment or innovation 
projects accordingly);   
• Product competitiveness and market profitability;   
• Project cost-effectiveness (estimation of planne d project realization profit, pay-back period 
and other economic indexes);  
• Budget effectiveness of a project (estimation of planned budget receipts);   
• Presence in the project of energy-saving a nd resource-saving technologies (evaluation of 
power intensity and materials output ratio cutting down);   
• Social importance of a project (creation of ne w work places, raising of wages, improving of 
work conditions);   
• Possible influence of a project on environment (estimation of ecological aspects of a project).   
 
The credit support is not provided for the borro wers which have already granted financial 
support from other state budget programs or receive it  from international financial organizations.   
  Beneficiaries
 
  Credit support is provided on the competitive basis.    
For participation in a competition are admitte d those economic organizations, which have 
invested the credits into investment and innovation projects and paid in 2007 interests for the provided 
credits (Regulated by the Order of the State Ag ency of Ukraine on investments and innovations 
No. 26 as of 24 April 2007 "On approval of the pr ocedure of competitive choice of investment and 
innovation projects for providing credit support from the state budget in 2007").   
 
 Amount of the received state support
 
 
Form 2007, million UAH 
Credit support on interest paid 143, 6 
 
 Duration  
  During 2007.     Statistics for estimation of trade effects
 
 
Amount produced by the enterprises 
which have got support 2007 
Not available 
 
4. Realization of advanced energy-saving technologies and alternative fuel sources 
production technologies 
 Policy objective and/or purpose  
  To encourage research and development of new technologies, realization of advanced energy-
saving technologies and alternative fu el sources production technologies.    G/SCM/N/155/UKR 
 Page 21 
 
 
   Background and authority  
 
The Law No. 489-V as of 19, December 2006 "On the State Budget of Ukraine for 2007" 
provides for this purpose a sum of 767400,0 thousand UAH.    
The Decree of the Cabinet of Ministries of Ukraine of 14 March 2007 No. 455 "On approval 
of the Order of application of funds provide d in the State budget 2007 for financial support of 
innovation and investment projects in economy".     Form
 
 
Credit support.   
 
According to the Decree of the Cabinet of Mi nisters of Ukraine as of 14 March 2007 No. 455 
the following credits may be granted:   
 
Intermediate credit – from one to three years;   Long-term credit – from three to five years.   
 
Repaying of intermediate credits starts in a year , of long-term credits – in two years after they 
have been granted.   
The credit interest should not exceed 7 per cent per annum, 0,5 per cent from which should be 
transferred to the state budget as payment for use bu dget money and the rest may be used by the state 
finance and credit institution for supplying cred its and covering the insurance costs.   
  Beneficiaries
 
 
Credits may be granted only for the projects which have got a positive decision of the 
National Agency on Effective Use of Energy Resources as to their efficiency in the sphere of implementation of advance energy-saving tec hnologies and alternative fuel sources production 
technologies and have a certificate on state registrati on of innovation project (Regulated by the Order 
of the State Agency of Ukraine on investments and innovations No. 33 as of 03 May 2007 "On 
approval of the procedure of competitive choice of  investment and innovation projects for granting 
credits for their realization out of the funds foreseen in state budget in 2007").     Credits are provided on the competitive basis.    
 The following criteria should be taken into consideration while evaluating projects for 
obtaining credits:    
• Scientific and technical criterion.   
• Production criterion (supply of necessary raw mate rials, utilities, equipment;  the level of 
technological innovations at project realization).   
• Market criterion (product price and quality compatibility).   
• Finance and economic criterion (provided profita bility level;  project repayment term;  ration 
of the beneficiary's money in the full project co st;  reliability as to a credit repayment;  paying 
capacity and financial stability of a credit recipient).   
• Social and environmental criterion (creation of new work places, budget receipts, influence of 
the production process on the environment, ade quacy to hygiene and sanitary, radiological, 
ecological, architectural and other standards).  
 G/SCM/N/155/UKR 
Page 22  
 
  The credit support is not provided for the borro wers which have already granted financial 
support from other state budget programs or receive it  from international financial organizations.   
  Amount
 
 
Form 2007 million UAH 
Credits providing 625,1 
 
 Duration  
 
 During 2007.   
  Statistics for estimation of trade effects
 
 
Amount produced by the enterprises 
which have got support 2007 
Production has not been foreseen for the year of 2007 
 
 
II. PART II.  SECTORAL PROGRAMMES 
 The legislative bases for Ukraine's sect oral assistance programs are found in:   
 
- Enabling legislation specific to the sector itsel f (shipbuilding, automotive etc.) cited below for 
each Sector;  and 
- The law applying a particular tax measure unde r for which assistance is provided (exemptions 
or deferral for import duties, VAT etc.).   
 
 The Sector specific enabling legislation is identified under each of the supported sectors listed below.  The relevant tax laws providing bene fits to enterprises in supported sectors are:   
 
- Law of Ukraine of 23 December 2004 No. 2285-IV "On the State Budget for 2005", Law of 
Ukraine of 20 December 2005 No. 3235-IV "On the State Budget for 2006" and Law of 
Ukraine of 19 December 2006 No. 489-V "On the State Budget for 2007".   
  Import duties  
- Law of Ukraine "On Common Customs Tariff" 5 February 1992 No. 2097-XII (with changes 
and amendments);  and 
- Law of Ukraine "On Customs Tariff of Uk raine" as of 5 April 2001 No. 2371-III (with 
changes and amendments).   
  VAT 
 
- Law of Ukraine "On Value Added Tax" as of  3 April 1997 No. 168/97 (with changes and 
amendments).   
 
Excise 
 
- Decree of the Cabinet of Ministers of Ukra ine "On Excise Duty" as of 26 December 1992, 
No. 18-92 (with changes and amendments);  and  G/SCM/N/155/UKR 
 Page 23 
 
 
  - Law of Ukraine "On Excise Duty and Import Duty Rates for Some of Vehicles" as of 
24 May 1996 No. 216/96-VR (with changes and amendments).   
  Income Tax  
- Law of Ukraine "On Corporate Income Tax" as of 28 December 1994 No. 334/94-VR (with 
changes and amendments).   
  Land Tax  
- Law of Ukraine "On Land Tax" as of 3 July 1992 No. 2535-XII (with changes and 
amendments).   
 
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 industr y to achieve greater efficiency and 
competitiveness.   
 
 Background and authority
 
  Subsidy measures are provided under the Law of  Ukraine "On Measures of State Support for 
the Ship-Building Industry in Ukraine" as of 15 June 2004 No. 1766-IV.  The mentioned below legal 
acts are also in force:   
 
 Decree of the Cabinet of Ministers of Ukra ine as of 14 February 2007 No. 221 approving the 
order for allocation of funds what were forese en in the State budget in 2007 for credit support of 
shipbuilding enterprises;    
 Decree of the Cabinet of Ministers of Ukraine as of 5 September 2007 No. 1102 approving 
changes to the list of enterprises-beneficiar ies of support of shipbuilding industry.   
  Form
 
  Deferral of Corporate Income Tax.   
 
 At option of an eligible shipbuilder, adva nce payments received from a customer and 
earmarked loans received for financing of seagoing crafts, river boats and other floating means may 
be placed in a special account and be exempt from withholding tax.  Funds in such accounts may only 
be used to meet costs associat ed with fulfilling the contract unde r which the advance payments are 
made or earmarked loans are received.  In the fiscal year in which the builder delivers the ship to the 
customer, payments to and from the special account  are included in gross revenue/expenditure for the 
purpose of calculating profit for corporate income tax.   G/SCM/N/155/UKR 
Page 24  
 
   Exemption from land tax 
  According to the Law of Ukraine "On State Budget of Ukraine for 2005" of 23 December 2004 No. 2285-IV in 2005 this measure  was exercised exceptionally by the decision of 
the respective local authorities in the portion aimed for local budget.   
 
 Later on the exemption from land tax was cha nged by the Law of Ukraine "On Amendments 
to the Law of Ukraine "On State Budget of Ukra ine for 2005" and some other legislative acts of 
Ukraine" of 25 March 2005 No. 2505-IV and was exercised in the following way:    
- since 1 April 2005 it came up to 75 per cent of the rates effective on the respective territories;   
- since 1 January 2006 it came up to 50 per cent of the rates effective on the respective 
territories;   
- since 1 January 2007 it came up to 25 per cent of the rates effective on the respective 
territories;   
- since 1 January 2008 this measure should be withdrawn.   
  Credit support   Since 1 January 2005, the support of seagoing cr afts, river boats and other floating means, 
building and reconstruction of basic production a ssets of shipbuilding industry was exercised by 
partial compensation of the interest paid to comme rcial banks for the provided credits.  Every year a 
certain budget allocation is foreseen by the Law of  Ukraine "On State Budget" for providing such a 
support.  However, in 2005 and 2006 no allocations were made.   In the State budget for 2007 a sum of 
50 000,0 thousand  UAH . has been foreseen for this purpose.   
 
 The procedure of use of such allocations from the State Budget is annually determined by the 
Cabinet of Ministers of Ukraine.     Exemption from import duties   This applied to imports by eligible shipbuilder s of inputs (construction equipment, materials, 
parts, and sub-assemblies) not produced in Ukraine or , if produced, did not comply with international 
standards as to certification or terms of individual contracts.  The Cabinet of Ministers of Ukraine 
annually approved a list of inputs to be exempted.     By the Law of Ukraine "On Amendments to the Law of Ukraine "On State Budget of Ukraine 
for 2005" and some other legislative acts of Uk raine" of 25 March 2005 No. 2505-IV provided that 
such exemption applied till 1 January 2007 only.     This privilege was applied only to contract s concluded before 1 March 2005 according to the 
Decree of the Cabinet of Ministers of Ukraine of 27 March 2006 No. 368 "On approval of the list and 
volumes of materials, equipment and parts, what  are used in shipbuilding by enterprises of 
shipbuilding industry defined by Article 1 of the Law "On measures of state support for the 
shipbuiding industry in Ukraine" and imported to the customs territory on the basis of contracts by these enterprises".     Beneficiaries
 
 
 The Cabinet of Ministers of Ukraine approv es 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  G/SCM/N/155/UKR 
 Page 25 
 
 
  Ministers of Ukraine of 21 December 2005, No. 1256 (last changes – by Decree of Cabinet of 
Ministers of Ukraine of 5 September 2007, No, 1102).     Amount
 
 
 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Deferral of Corporate Income Tax 3,702 16,227 25,942 
Exemption from import duties 0,631 0 Not applied 
Exemption from land tax 7,417 7,098 3,724 
Credit support 0 0 0,07 
 
 Duration  
 
 Until 1 January 2012.   
  Statistics for evaluation of trade effect
 
 
Amount of products 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Seagoing crafts and other 
floating means 2124 2303 2373 
 
2. Automotive Sector 
 Policy objective and/or purpose  
 
 Promote investment and development in the prod uction of cars, trucks, buses and their parts.   
  Background and authority
 
 
 Preferential tax treatment for production of car s, trucks, buses and manufacture of parts was 
initially introduced by the Law of Ukraine "On Stim ulation of Production of Motor Cars in Ukraine" 
No. 535/97-VR of 19 September 1997 (with changes and amendments).     At present regime is provided under the Law of  Ukraine "On Development of the Motor-Car 
Industry in Ukraine" of 18 March 2004, No. 1624-IV (with changes and amendments).   
 
 Form
 
  Exemptions from corporate income tax.    
 Exemption applied to that part of income, wh ich is re-invested and used for the loan re-
payment within investment project.     In 2005 this measure was withdrawn by the La w of Ukraine "On Amendments to the Law of 
Ukraine "On State Budget of Ukraine for 2005" and some other legislative acts of Ukraine" of 25 March 2005 No.2505-IV.   G/SCM/N/155/UKR 
Page 26  
 
   Exemption from import duties 
 
Exemption covered goods and component parts,  which were imported by the enterprises 
according to the Law of Ukraine "On Development of  the Motor-Car Industry in Ukraine" and were 
used by these enterprises for production of cars, buses , component parts and spare parts originated in 
Ukraine as well as for construction, re-construc tion, technical equipmen t and re-equipment of 
production facilities, building and/or modernizing of works.  The list of such enterprises, procedure 
and volume of import as well as criteria of their pr oper use and control proce dure were determined by 
the Cabinet of Ministers of Ukraine.  Improper use of the mentioned goods would cause payment of 
import duties plus fine according to the legislation.   
 
 According to the Decrees of the Cabinet of Ministers of Ukraine of 20 August 2005 No. 788 
and of 23 May 2007 No. 755, the Decree of the Cabinet of Ministers of Ukraine of 01 June 2002 No. 737 "On the list, procedure and volume of exempt from import duty imported goods that are used for construction and for production activity of ente rprises producing automobiles and spare parts for 
them" has lost its force  with the exception of executing court ru lings on custom clearance of goods at 
tariff preference, provided by the Law of Ukrain e "On Development of the Motor-Car Industry in 
Ukraine" of 18 March 2004 No. 1624-IV.     Exemption from VAT on imports of equipment and inputs  
 Exemption covered same goods as for import duties.   In 2005, this measure was withdrawn by 
the Law of Ukraine "On amendments to the La w of Ukraine "On the State Budget of Ukraine 
for 2005" and some other legislative acts of Ukraine" of 25 March 2005 No. 2505.     Zero rates of VAT on domestic sales 
 
 Sales of manufactured cars, trucks, buses by qualified enterprises on the domestic market 
were charged VAT at a zero rate.     In 2005, this measure has withdrawn by the La w of Ukraine "On Amendments to the Law of 
Ukraine "On State Budget of Ukraine For 2005" a nd some other legislative acts of Ukraine" of 
25 March 2005 No. 2505.   
  Exemption from excise tax   Sales of passenger cars, trucks and motorc ycles manufactured in Ukraine were exempted 
from excise taxes when sold on th e domestic market.  The exempti on applied to companies, which 
produce a minimum of 1,000 automobiles or 1,000 motorcycles per year.  This measure was withdrawn by the Law of Ukraine "On amendments  to the Law of Ukraine "On State Budget of 
Ukraine For 2005" and some other legislative act s of Ukraine" of 25 March 2005 No. 2505.   
  Exemption from land tax 
 
 The land area exempt from land tax is proportiona l to the investment ma de.  One hectare of 
land is exempted for each US$ 400,00 0 of investment at the rate of exchange, as determined by the 
National Bank of Ukraine, on the day of the investment.    
 According to the Law of Ukraine "On State Budget of Ukraine For 2005" of 
23 December 2004 No. 2285-IV in 2005 this measure  was exercised exceptionally by the decision of 
the respective local authorities in the portion aimed for local budget.     G/SCM/N/155/UKR 
 Page 27 
 
 
   Later on the exemption from land tax has b een changed by the Law of Ukraine "On 
amendments to the Law of Ukraine "On the St ate Budget of Ukraine for 2005" and some other 
legislative acts of Ukraine" of 25 March, 2005 No. 25 05-IV and was exercised in the following way:   
 
- since 1 April 2005 it came up to 75 per cent of the rates effective on the respective territories;   
- since 1 January 2006 it came up to 50 per cent of the rates effective on the respective 
territories;   
- since 1 January 2007 it came up to 25 per cent of the rates effective on the respective 
territories;   
- since 1 January 2008 this measure should be withdrawn.   
 
 Beneficiaries  
  Enterprises, which according to the Law of Uk raine "On Stimulation of Production of Motor 
Cars in Ukraine" No. 535/97-VR of 19 September 1997 (with changes and amendments) invest in the 
assembly of cars, trucks and buses and in the ma nufacture of parts for automotive sector, have 
investment programmes approved by the Cabinet of Ministers of Ukraine by 01 January 2004 and 
have (including foreign) exclus ively in monetary form.   
  To qualify enterprises must meet minimum leve ls of investment (in monetary form):   
 
- for manufacturing cars – not less than US$ 150 million;   
- for manufacturing trucks and buses – not less than US$ 30 million;  and 
- for manufacturing parts for cars and buses – not less than US$ 10 million.   
 
Amount
 
 
 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Exemption from Corporate Income Tax 0 0 0 
Exemption from import duties 157,5 0 0 
Exemption from VAT on imports  239,1 0 0 
Zero rates of VAT on domestic sales 94,1 0 0 
Exemption from land tax 2,4 1,2 0,581 
Exemption from Excise taxes on 
domestic sales 136,3 0 0 
 
 Duration  
  Until 31 December 2008.   
 
 Statistics for estimation of trade effects
 
 
Production (of enterprises-
beneficiaries) 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Cars, Trucks, Buses, Parts thereof 6839,5 8885,7 17915,0 
 G/SCM/N/155/UKR 
Page 28  
 
  3. Aircraft 
 Policy objective and/or purpose
 
  The overall objective for providing aid to the ai rcraft construction industry is to promote an 
efficient use of existing production, research and de velopment facilities and to encourage investment 
to provide for modernization and great er competitiveness of the industry.   
  Background and authority
 
  Preferential tax treatment in aircraft construc tion that was provided for in the Law of Ukraine 
"On State Support of Aircraft Construction Indus try in Ukraine" No. 2660-III of 12 July 2001 expired 
1 January 2007 .   
  Currently support is provided by Decree of the Cabinet of Ministers of 14 February 2007 No. 226 "On approval of the order for application of  funds what were foreseen in the State budget 
for 2007 for support of aircraft and space industry by means of credit support".   
  According to the Law of 19 December 2006 No . 489-V "On the State Budget for 2007" it was 
foreseen 200 000,0 UAH for aircraft and space industry support.     Form
 
  Before 1 January 2007 
 
 Deferral of Income Tax  
 At option of an eligible aircraft producer , advance and interim payments received from a 
customer may be placed in a special account and be  exempted from withholding tax.  Funds in such 
accounts may only be used to meet costs associated with fulfilling the contract under which the advance/interim payment is made.  In the fiscal year  in which the producer delivers the aircraft to the 
customer, payments into and from the special acc ount are included in gross revenue/expenditure for 
the purpose of calculating profit for corporate income tax.   
 
 Exemption from import duties   It applied to imports by eligible aircraft pr oducers of inputs (equipment, materials, and sub-
assemblies) not produced in Ukraine or, if produced, do not comply with international requirements as 
to classification or terms of individual contracts.  The Cabinet of Ministers approved annually the list 
and volumes of inputs for exemption.     Products that could be imported duty free by the eligible enterprises were listed in the 
Resolution of the Cabinet of Ministers of Ukraine as of 12 April 2002 No. 519 (with amendments).    
 Since 16 May 2005, this measure had been withdrawn by the Law of Ukraine "On 
amendments to the Law of Ukraine "On the St ate Budget of Ukraine for 2005" and some other 
legislative acts of Ukraine" of 25 March 2005 No. 2505-IV.     Exemption from VAT on imports 
 
 Exemption was a subject to the same conditions  and approval process as for import duties.   
  G/SCM/N/155/UKR 
 Page 29 
 
 
   This measure was withdrawn by the Law of Uk raine "On Amendments to  the Law of Ukraine 
"On State Budget of Ukraine For 2005" and some ot her legislative acts of Ukraine" of 25 March 2005 
No. 2505.     Zero rates of VAT on domestic sales 
 
 Sales of aviation products manufactured at  the expense of State Budget by qualified 
enterprises on the domestic market are charged VAT at a zero rate.    
This measure was withdrawn by the Law of Uk raine "On amendments to the Law of Ukraine 
"On State Budget of Ukraine For 2005" and some ot her legislative acts of Ukraine" of 25 March 2005 
No. 2505.     Exemption from land tax  
 According to the Law of Ukraine "On State Budget of Ukraine For 2005" of 
23 December 2004 No.2285-IV in 2005 this measur e was exercised exceptionally by the decision of 
the respective local authorities in the portion aimed for local budget.     Later on the exemption from land tax has b een changed by the Law of Ukraine "On 
amendments to the Law of Ukraine "On State Budge t of Ukraine For 2005" and some other legislative 
acts of Ukraine" of 25 March 2005 No 2505-IV and was exercised in the following way:   
 
- since 1 April 2005 it came up to 75 per cent of the rates effective on the respective territories;   
- since 1 January 2006 it came up to 50 per cent of the rates effective on the respective 
territories.   
 
 Beneficiaries
 
  The list of eligible enterprises presented in Artic le 2 of the Law of Ukraine "On State Support 
of Aircraft Construction Industry in Ukra ine" No. 2660-III of 12 July 2001.   
 
 Amount
 
 
 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Deferral of Corporate Income Tax 0 0 Not applied 
Exemption from import duties 0,03 0 Not applied 
Exemption from VAT on imports 0,2 0 Not applied 
Zero rates of VAT on domestic sales 0,02 0 Not applied 
Exemption from land tax  19 14,5 Not applied 
 
 After 1 January 2007 
  Form
 
  Credit support
 
  Support is provided by partial compensation of the interest paid to commercial banks in 2007 
for the provided intermediate (up to three years)  or long-term (up to five years) credits.  
Compensation must not exceed double discount rate of the National Bank of Ukraine at the date of 
interest calculation.   G/SCM/N/155/UKR 
Page 30  
 
   Beneficiaries
 
  Aircraft enterprises and organizations which r ealize innovation and investment projects with 
purpose of creation and application to production of modern technology.    
 Support is provided on the competitive basis in accordance with the Order of the Ministry of 
Industrial Policy of 15 March 2007 No. 103 "On approval of the procedure of competitive choice of 
investment and innovation projects for creation and application to production of modern technology in 
aircraft and space industry".    
 The following criteria should be taken into consideration while evaluating projects for 
obtaining support:    
• Effectiveness of use of budget funds;   
• Effectiveness of project (provided profitabilit y level;  project repayment term;  new jobs 
creation, payments to the budget, ration of the bene ficiary's money in the full project cost);   
• Technical basis of organisation of futu re production (technology, equipment);   
• Adequacy to hygiene and sanitary, radiological, eco logical, architectural and other standards);   
• Presentation of relevant project documentation.   
 
Amount
 
 
 2007 р., million UAH. 
Credit support  184,7 
 
 Duration  
  During 2007.     Statistics for estimation of trade effects
 
 
 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Production 2203,0 2684,0 4300,0 
 
4. Space Industry 
 Policy objective and/or purpose  
  Assistance is intended to preserve and effectiv ely 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 enterpri ses in the space industry is provided for in the 
Law of Ukraine "On State Support of Space Activity" No. 1559-III of 16 March 2000.   
 
The Law No. 489-V as of 19, December 2006 "On the State Budget of Ukraine for 2007" 
provides for support of aircraft and space indus try a total sum of 200 000,0 thousand UAH.   
  G/SCM/N/155/UKR 
 Page 31 
 
 
  The Decree of the Cabinet of Ministries of Ukraine of 14 February 2007 No. 226 "On 
approval of the Order of application of funds provi ded in the State budget 2007 for support of aircraft 
and space industry by means of credit support".     Form
 
 
 Accelerated amortization of key assets   The 20 per cent annual accelerated amortization is determined for key assets of group 3.    
 Group 3 includes key assets except for buildings, constructions, their structures and 
transmitting devices, motor transport and components for it, furniture, household, electronic, optical and electro-mechanical devices and instruments, other office equipment and devices, electronic computers, other information processing machines, information reading and printing devices, other information systems, computer programs, telephones (including cell phones), microphones and 
portable radio transmitters, cost of which is highe r than those goods (things) of little value.   
  At this the amortization of key assets of group 3 is being realized until the book cost makes 
zero.    
Credit support 
 
 Support is provided by partial compensation of the interest paid to commercial banks in 2007 
for the provided intermediate (up to three years)  or long-term (up to five years) credits.  
Compensation must not exceed double discount rate of the National Bank of Ukraine at the date of interest calculation.   
 
 Exemption from import duties   Exemption applied to imports by eligible enterp rises of products used for production of space 
machinery (including units, systems and their compone nts for space complexes, space carrier rockets, 
space vehicles and land segments of space systems), what were not produced in Ukraine.  The Cabinet 
of Ministers approved the relevant list a nd volumes of goods to be exempted.   
  The list and volumes to be exempted, as well as the list of qualified enterprises were approved 
by the Resolution of the Cabinet of Ministers of Ukraine as of 22 February 1999 No. 276 (with changes and amendments).   
 
 This measure was withdrawn by the Law of Uk raine "On amendments to the Law of Ukraine 
"On State Budget of Ukraine For 2005" and some other legislative acts of Ukraine" of 25 March 2005, No. 2505-IV.     Exemption of imports from VAT 
 
 The same as to import duties.     This measure was withdrawn by the Law of Uk raine "On amendments to the Law of Ukraine 
"On State Budget of Ukraine For 2005" and some other legislative acts of Ukraine" of 
25 March 2005, No. 2505-IV.   G/SCM/N/155/UKR 
Page 32  
 
   Exemption from VAT on sales in the domestic market 
  Sales of space complexes, space carrier rockets, space vehicles, land segments of space systems and their units, systems and components, by eligible enterprises on the domestic market are 
exempted from VAT.   
 
 This measure was withdrawn by the Law of Uk raine "On amendments to the Law of Ukraine 
"On State Budget of Ukraine For 2005" and some other legislative acts of Ukraine" of 25 March 2005, No 2505-IV.    
 Exemption from land tax 
  The list of enterprises exempted from land tax was annually approved by the Cabinet of Ministries of Ukraine.    
 The latest list (for 2004) approved by the Resolution of the Cabinet of Ministries of Ukraine 
of 31 March 2004 No. 412.     This measure was withdrawn by the Law of Uk raine "On amendments to the Law of Ukraine 
"On State Budget of Ukraine For 2005" and some other legislative acts of Ukraine" of 25 March 2005, No. 2505-IV.   
 
Beneficiaries
 
  The agents of the space industry which realize their activity according to the Law of Ukraine 
"On Space Activities" (with changes and amendm ents) of 15 November 1996, No. 502/96.   
 
 Credit support is provided to enterprises a nd organizations which realize innovation and 
investment projects in space industry with purpose of creation and application to production of 
modern technology.     Support is provided on the competitive basis in accordance with the Order of the Ministry of 
Industrial Policy of 15 March 2007, No. 103 "On appr oval of the procedure of competitive choice of 
investment and innovation projects for creation and application to production of modern technology in 
aircraft and space industry.     The following criteria should be taken into consideration while evaluating projects for 
obtaining support:   
 
• Effectiveness of use of budget funds;   
• Effectiveness of project (provided profitabilit y level;  project repayment term;  new jobs 
creation, payments to the budget, ration of the bene ficiary's money in the full project cost);   
• Technical basis of organisation of futu re production (technology, equipment);   
• Adequacy to hygiene and sanitary, radiological, eco logical, architectural and other standards);   
• Presentation of relevant project documentation.    G/SCM/N/155/UKR 
 Page 33 
 
 
   Amount  
 
 2005, million UAH 2006, m illion UAH 2007, million UAH 
Accelerated amortization 0,637 1,433 0,098 
Credit support Not applied Not applied 0 
Exemption from import 
duties 0,234 0,0 0 
Exemption from VAT on 
imports  2,692 0,0 0 
Exemption from land tax 0,0 0,0 0 
Exemption from VAT on 
domestic sales 0,802 0,0 0 
 
 Duration  
  Until 1 January 2009.     Statistics for estimation of trade effects
 
 
Amount of products 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Amount of products in established prices 1 427,181 1 821,250 2122,2 
 
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
 
  Since September 2003 until the year of 2007, the state support to coal mining enterprises had been provided in accordance with new "Procedure of provision and identification of the state support to coal producers for partial refund of production expenses, as well as construction and technical re-
equipment of black coal, brown coal and peat pr oducers" that was approved by the Resolution the 
Cabinet of Ministers of Ukraine of 21 August 2 003, No. 1311 (with changes and amendments).   
  Since 2007, the state support for construction and technical re-equipment of coal enterprises is been provided in accordance with the Resoluti on of the Cabinet of Ministers of Ukraine of 
6 March 2007, No. 378 "On the procedure of appli cation of the funds from the state budget aimed at 
support of the enterprises producing coal, brown co al and peat, by construction and technical re-
equipment and overhaul of mining equipment" and the Resolution of the Cabinet of Ministers of 
Ukraine No. 1764 of 27 December 2001 "On approval of  the Procedure for State Financing of Capital 
Construction".    
 The Resolution of the Cabinet of Ministers of Ukraine of 2 February 2007, No. 139 "On the 
procedure of application in 2007 of the funds from the state budget aimed at coal producing enterprises support, (including those producing br own coal) through partial refund of production 
expenses, particularly for fulfilment of gua rantee bonds as to budget loan return".   
 G/SCM/N/155/UKR 
Page 34  
 
   The scope of the program is determined annua lly under the Law on State Budget of Ukraine 
for the corresponding year.
   
 
 By the Law on State Budget of Ukraine for 2006 of 20 December 2005, No. 3235-IV it has 
been foreseen the following:    
• State support of coal producing enterprises for partial refund of production expenses, 
particularly for fulfilment of guarantee bonds as to budget loan return in sum of 1705179,2 
thousand UAH.   
• State support of construction and technical re-e quipment of black coal, brown coal and peat 
producing enterprises in sum of 1415018,0 thousand UAH.   
• Cheapening of rate of credits aimed for constr uction and technical re-equipment of black coal, 
brown coal and peat producing enterprises in sum of 20000,0 thousand UAH.   
 
 Amended plan for 2006 was the following:   
 
• State support of coal producing enterprises for partial refund of production expenses, 
particularly for fulfilment of guarantee bonds as to budget loan return in sum of 2 005 179,2 thousand UAH.   
• State support of construction and technical re-e quipment of black coal, brown coal and peat 
producing enterprises in sum of 1 230 018,0 thousand UAH.   
• Credit support aimed for construction and techni cal re-equipment of black coal, brown coal 
and peat producing enterprises in  sum of 0,0 thousand UAH.   
  By the Law on State Budget of Ukraine for 2007 of 19 December 2006 No. 489-V it has been foreseen the following:    
• State support of coal producing enterprises (inc luding those producing brown coal) for partial 
refund of production expenses, particularly for fulfilment of guarantee bonds as to budget loan return in sum 2536800,0
 thousand UAH;   
• State support of coal producing enterprises (including those producing brown coal) for 
construction, technical re-equipment and mining machinery overhaul in sum 1732063,0 thousand gryvna;  including su m of 22000,0 thousand UAH aimed for peat 
extraction industry;   
• Credit support aimed for construction and techni cal re-equipment of black coal, brown coal 
and peat producing enterprises in  sum of 108000,0 thousand UAH.   
  Amended plan for 2007 was following:    
• State support of coal producing enterprises (inc luding those producing brown coal) for partial 
refund of production expenses, particularly for fulfilment of guarantee bonds as to budget 
loan return in sum 2 800 296,7 thousand UAH.   
• State support of coal producing enterprises (including those producing brown coal) for 
construction, technical re-equipment and mining machinery overhaul in sum 1 701 066,3 thousand UAH;  including su m of 22000,0 thousand UAH aimed for peat 
extraction industry.   
• Credit support aimed for construction and techni cal re-equipment of black coal, brown coal 
and peat producing enterprises in sum of 2 500,0 thousand UAH.    G/SCM/N/155/UKR 
 Page 35 
 
 
   Form  
  Granting funds for partial covering production costs
 
  Funds are granted to coal mining enterpri ses to partially cover production cost.   
 
According to the Resolution of the Cabinet of Ministers of Ukraine of 2 February 2007, 
No. 139 coal producing enterprises (including those producing brown coal) use the funds from the state budget for paying salaries and other compulsory payments connected with salaries.  The funds from the state budget are also used for covering electricity charges and fulfillment of guarantee bonds 
as to return of budget salary loans.   
 
The funds from the state budget are distributed between the coal producing enterprises which 
use these funds for covering the cost of self- produced coal for 1 gryvna cost of such product.  This 
covering is applied in case the predicted sale price does not cover the production costs.   
 
In 2006, the funds for coal producing enterpri ses were provided irrespective of the form of 
ownership.  The funds were distributed basing on the predicted production costs and volume of sales 
of the respective enterprises.     Conditions for obtaining support:   
 
- Coal production of this enterprise should be demanded in Ukraine;   
- This enterprise commits itself to increase the e fficiency of production, particularly cut down 
cost price;  and 
- Volume of the commercial coal output being expressed in forecast price of sales does not 
cover production expenses.   
 
Main economic indexes for determina tion of the state support are:   
 
- Volume of the coal output;   
- Production expenses.   
 
 State support to constructio n and technical re-equipment
 
  The state or public ownership enterprises are granted state funds as permanent loan, while the 
enterprises of the other forms of ownership are gi ven funds in the form of the credits for capital 
construction for the period of not longer than three or in some cases five years (The Resolution of the 
Cabinet of Ministers of Ukraine of 27 December  2001, No. 1764 "On approval of the Procedure for 
State Financing of Capital Construction" , with changes and amendments).   
 
The funds are used for:   
 
1) financing of capital construction proj ects placed in operation in 2007 and those 
projects which are not less than 50 per cent ready for operation;   
2) for financing of conservation of uncomplet ed coal constructions which are not less 
than 60 per cent ready;  
3) financing of technical re-equipm ent of coal producing enterprises; 
4) financing of major repairs of  mining e quipment which requires such repairs either 
according to technical documentation or due to emergency failure.   G/SCM/N/155/UKR 
Page 36  
 
  Credit support
 
 
In 2006:   The Resolution of the Cabinet of Ministers of Ukraine of 28 April 2006, No. 604 
"On approval of the Procedure of application in 2006 of the funds from the state budget aimed at 
support of credits for construction and technical re -equipment of black coal, brown coal and peat 
producing enterprises".   
 
Partial compensation of interest rates on cred its obtained in banks fo r financing of capital 
constructions and purchasing of mining,  tunneling and fixed installations.   
 
The compensation is paid on the competitive b asis for coal mining enterprises, which have 
got the bank credits at the conditions that inter est per annum does not exceed 16 per cent for short-
term credits and 17 per cent for long-term credits.  The compensation is paid in the sum of discount 
rate of the National Bank of Ukraine on the date of charging interests for credits.    
In 2007:   The Resolution of the Cabinet of Ministers of Ukraine of 14 February 2007, 
No. 230 "On approval of the Procedure of applica tion in 2007 of the funds from the state budget 
aimed at credit support for construction and technical re-equipment of black coal, brown coal and peat 
producing enterprises".    
Partial compensation of interest rates on credits is paid for black coal, brown coal and peat 
producing enterprises which have got the bank credits for financing of pits an d shafts constructions 
and purchasing of mining, tunnelin g and fixed installations.   
 
The compensation is paid at medium-term (up to three years) and long-term (up to five years) 
credits in the sum of discount rate of the National Bank of Ukraine on the date of charging interests 
for credits at the condition that interest rate do es not exceed 1,8 of the discount rate of the National 
Bank of Ukraine on the date of charging interests for credits.     Beneficiaries
 
  In 2006, the program was applied for black co al, brown coal and peat producing enterprises 
irrespectively of enterprise ownership and in 2007  it was applied for state coal mining enterprises 
(including those producing brown coal).     The program does not apply to enterprises subject to liquidation.    
 List of eligible enterprises is drawn up by the Ministry of Mining on the basis of economic 
indicators of enterprises activity and their plans for respective year.   
  In 2007, compensation of interest rates on cred its obtained in banks is provided only for state 
enterprises.   
 
 Amount  
 
 2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Partial refund of expenses from the production price 1035,8 1904,0 2706,0 
Fulfilment of guarantee bonds as to 
budget loan return Not applied 49,6 86,9  G/SCM/N/155/UKR 
 Page 37 
 
 
   2005, million 
UAH 2006, million 
UAH 2007, million 
UAH 
Support of construction, technical re-equipment and major repairs 1175,2 1186,7 1691,0 
Credit support aimed for construction 
and technical re-equipment Not applied 0,0 2,4 
 
 Duration  
  Is not determined, on the annual basis.     Statistics for estimation of trade effects
 
 
Amount produced by the 
enterprises which have got support 2005, million 
tons 2006, million 
tons 2007, million 
tons 
Black coal  46,1 46,3 42,2 
Brown coal n/a n/a n/a 
Peat 0,613 0,502 n/a 
 
6. Book-Publishing 
 Policy objective and/or purpose  
  Overcoming of the crisis in this sector a nd providing for developmen t of Ukrainian book-
publishing.    
 Background and authority
 
  Support is provided by the Law of Ukraine "On State Support of Book-publishing in Ukraine" 
of 6 March 2003, No. 601-IV (with changes a nd amendments) and the Law of Ukraine of 
20 November 2003, No. 1300-IV "On amendments to some laws of Ukraine concerning state support 
to book-publishing in Ukraine".   
  In the year 2003, support was not provided.  In 2004, the Law of Ukraine of 6 March 2003 No. 601-IV was suspended by the Law of Ukraine "On the State Budget of Ukraine for 2004" of 
27 November 2003, No. 1344-IV with exemption for production of copy-books, textbooks and 
school-books.   
 
 Later by the Law of Ukraine of 17 June 2004, No. 1801-IV "On changes to the Law of 
Ukraine "On the State Budget of Ukraine for 2004" the Law of Ukraine No. 601-IV was resumed.   
  Form
 
 
 Exemption from import duties   Exemption applies to imports of products  used for book-publishing (paper, cardboard, 
cellulose, other polygraphic materials, equipment, computer-based equipment including units) that are 
not produced in Ukraine.  The list of inputs to be  exempted presented in the Law of Ukraine "On the 
Common Custom Tariff" No. 2097-XII of 5 Februa ry 1992 (with changes and amendments).   G/SCM/N/155/UKR 
Page 38  
 
   Exemption from VAT on imports 
  The same as for import duties.     This privilege was suspended by the Law of Ukraine "On the State Budget of Ukraine 
for 2004" of 27 November 2003 No. 1344-IV w ith exemption for production of copy-books, 
textbooks and school-books.     Later that privilege was resumed by the Law of Ukraine of 17 June 2004 No. 1801-IV "On 
changes to the Law of Ukraine "On the State Budget of Ukraine for 2004".   
 
 Exemption from VAT on domestic sales  
Exemption applies to supply of services in books-publishing, activity of production and 
distribution by publishing-houses and organisations , polygraphic enterprises of books-publishing 
production produced in Ukraine.  Also applies to  production and/or supply of paper, cardboard 
produced in Ukraine for books production, and to supply of books production produced in Ukraine exempt advertising services and publishe d materials of erotic nature.   
  Exemption from Corporate Income Tax  
 Exempted income of publishing-houses and organisations, polygraphic enterprises and 
distributors of books-publishing production, produced in Ukraine.     This privilege was withdrawn by the Law of Ukraine "On the State Budget of Ukraine 
for2004" of 27 November 2003 No. 1344-IV.   
 
 Later that privilege was resumed by the Law of Ukraine of 17 June 2004 No. 1801-IV "On 
changes to the Law of Ukraine "On the State Budget of Ukraine for 2004".    
Beneficiaries
 
 
 Publishing-houses and organisations, polygra phic 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
 
 
 2005 р., million 
UAH. 2006 р., million 
UAH. 2007 р., million 
UAH. 
Exemption from Corporate Income Tax 22,2 31,1 34,3 
Exemption from import 
duties 8,84 14,8 25,9 
Exemption from VAT 
on imports 48,9 75,6 53,1 
Exemption from VAT 
on domestic sales  411,6 504,1 446,0 
 
 Duration  
  From 1 January 2004 till 1 January 2009.    G/SCM/N/155/UKR 
 Page 39 
 
 
   Statistic for estimation of trade effects  
 
Production 2005. 2006 2007 
Number of titles of 
books and brochures, published items 15720 
 15867 773
1 
Annual Edition, 
thousands items 54059,8 54209,6 2228,5 
 
 1 Of state enterprises of the State Committee of television and broadcasting only.   
  Additionally enterprises of State Stock Comp any "Ukrvydavpoligrafi ya" in 2007 published 
books and magazines in sum 85,0 million UAH.   
   
__________