Dear Readers,

To attract investments, the state introduced changes to the Entrepreneurial Code and the Tax Code provisions regulating the requirements for concluding investment agreements and agreements on investment obligations.

Investment Agreements

The amendments abolished the requirement for investment agreements to comply with the approved list of activities.1 Corresponding changes were also introduced2 to the Governmental resolution establishing the list of priority activities for investment projects.

At the same time, the amendments introduced a list of 14 types of activities prohibited from concluding an investment agreement. The prohibited list includes auditing activities, professional activities in the securities market, and activities in the field of digital mining.

As the scope of granted investment preferences depends on the volume of investments and the conditions of the investment project, the amendments excluded from the Entrepreneurial Code a provision establishing an unconditional right of an investor under an investment agreement to reimburse up to 20% of the cost of construction and installation work and equipment purchase.

Agreements on Investment Obligations

The amendments reduced3 from 150 000 000 to 75 000 000 times the monthly index factor the threshold for the aggregate investment amount required for concluding an agreement on investment obligation for eight years, including the year of application. In addition, an investor is obligated to fund at least half of the total investments (reduced from 70%) within the first four years of the project (decreased from five years).

The amendmends expanded4 the range of taxpayers qualifying for concluding agreements on investment obligations:

  • The requirement for an investor’s export orientation is abandoned;
  • The agreement can be concluded by a large or medium-sized entity (not only large taxpayers on the horizontal monitoring).

The amendments to the Entrepreneurial Code came into effect on 12 January 2023, while the corresponding changes to the Tax Code took effect on 1 January 2023.

1 Article 295-2 of the Entrepreneurial Code and Article 712-1 of the Tax Code

2 Governmental Resolution No. 158 On Amendments to Governmental Resolution No. 13 of 14 January 2016 On Certain Issues of the State Support of Investments, dated 23 February 2023

3 Article 295-3 of the Entrepreneurial Code

4 Article 295-3 of the Entrepreneurial Code and Article 712-4 of the Tax Code