LAW NO. 2480 REDUCED THE TAX BURDEN ON “GREEN” GENERATION

Vladyslav Sokolovskyi’s comment to the “Energoreforma” information and analytical portal regarding the introduction of the cash method of VAT liability for RES generation.

Amendments to the Tax Code have now made it possible for “green” power plants to determine the date of occurrence of tax liabilities and tax credit from the load reduction service using the cash method. That is, VAT has to be paid after receiving money from NPC Ukrenergo. This benefit will be valid until 1 January 2026.

Income taxation will also be eased. Until 19 August of this year, the dates of receipt of payment from the sale of electricity at a “green” tariff and/or the provision of load reduction services did not affect income tax taxation. After the amendments, this tax will not be calculated on such transactions if payment has not been received at the end of the reporting period. This benefit will be valid between 1 January 2022 and 1 January 2024.

Law 2480 will partially solve the problem of additional financial burden on the power plants of the RES sector, and will also help “green” generation to escape from shutdowns and insolvency.