Industrial parks will simplify the relocation of industrial enterprises during the war and speed up economic recovery after the victory

A tool for the development of industry is being introduced in Ukraine, which has long been successfully used all over the world, the People’s Deputy noted.

Dmitry Kisilevsky / photo

On June 21, the Verkhovna Rada adopted tax and customs incentives for industrial parks in Ukraine. In particular, laws No. 5688 and No. 5689 were approved, providing for the exemption of future residents of industrial parks from import VAT and customs duties on equipment, as well as exemption from income tax for 10 years. In addition, local self-government bodies receive the right to provide local tax incentives.

The initiator of the bills Dmitry Kisilevsky informedthat the requirement to use the imported equipment within the framework of the industrial park without the right of alienation for 5 years will become a safeguard against abuse of tax benefits.

Exemption from income tax is allowed subject to the reinvestment of a part of profits equivalent to the amount of income tax. Also, residents of industrial parks cannot accrue and pay dividends. And it must be a separate legal entity physically and legally located inside the park.

“Ukraine is implementing an industrial development tool that has long been successfully used around the world,” Dmitry Kisilevsky noted, “For example, in Hungary, about 30% of GDP is generated in 210 industrial parks. In Turkey, 400 very successful industrial parks actually produce the entire Turkish industry. Every dollar of state investment in the infrastructure of industrial parks will attract 5-6 dollars of investment.”

Dmitry Kisilevsky also noted the importance of adopting incentives for industrial parks under the current martial law.

“Why should industrial parks be launched right now, without waiting for the war to be won? Firstly, industrial parks create favorable conditions for the relocation of industrial enterprises. Secondly, unlike initiatives to open imports, new tax incentives are aimed at domestic production and workers places that Ukrainians really need now. Thirdly, for the de-occupied and affected territories, industrial parks will become a convenient tool for organizing industrial development and resuming the work of enterprises. Thus, industrial parks will simplify the relocation of industrial enterprises during the war and accelerate economic recovery after the victory,” summed up the people’s deputy.

In September 2021, the Verkhovna Rada adopted the first of three bills for the development of industrial parks in Ukraine. It provided for the possibility of financing from the budget the supply of infrastructure and networks to industrial parks, the possibility of compensating connection to networks within the park, as well as the possibility of compensating interest rates on loans. The government was also instructed to allocate at least UAH 2 billion annually for the implementation of programs to support industrial parks.

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