Limits on tax breaks in mining towns to prevent them from being turned into internal offshores – Hetmantsev

The resource law (bill No. 5600) sets limits for obtaining tax breaks until 2037 in mining towns, this will not allow turning them into internal offshores, believes Danylo Hetmantsev, Head of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy.

"I tell you unequivocally: no, there will be no risks. We have introduced an upper level of turnover. The amount of income of an enterprise that receives such tax benefits should not exceed UAH 40 million a year – this is nothing," he said in an exclusive interview with Interfax-Ukraine.

According to the head of the committee, the tax benefits established by law will allow medium-sized businesses to start production, processing in these cities, and create jobs. "And after reaching the volume of over UAH 40 million, switch to the usual system. Yes, indeed, many benefits are given, it's true. But these settlements are dying, they are already empty. There is no work. Conditions of benefits: a company should not just be registered, it should have production. Plants, factories, small factories that are engaged in production on this territory have a staff of 10 people, pay them a salary and have no branches anywhere else, except for this town itself," the parliamentarian explained.

As reported, the resource law (bill No. 5600) allows new companies in mining towns to be exempted from a number of taxes within the framework of a special tax regime for 15 years. There are 18 such settlements in Ukraine.

A special tax regime is introduced for newly created manufacturing enterprises that meet a number of criteria. In particular, the average number of hired employees is at least 10 people, the activities of these enterprises should be carried out exclusively in this city, and the amount of the annual income of such an enterprise should not exceed UAH 40 million.

Source: www.en.interfax.com.ua