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16:44 01 Dec 2020

Rada passes law unblocking 100 million euro loan from Poland

The Verkhovna Rada passed a law needed to obtain a loan from Poland for border development and several other projects.

304 people's deputies in total supported law draft №3039a in the second reading.

The adopted law provides for amendments to the Tax Code regarding the rate of value-added tax on certain transactions for the period of implementing the agreement with Poland on the provision of this loan. Governments signed the loan agreement in 2015 for 30 years.

Therefore, operations of supplying goods/services in the customs territory of Ukraine, carried out directly by executors registered in Poland, and their representative offices registered in the customs territory of Ukraine, are temporarily taxed at a zero VAT rate.

Operations are taxed under the contracts concluded for implementing this agreement with clients on projects for developing border road infrastructure and arranging border crossings of the Ukrainian-Polish border and other projects to be agreed by the parties and financed under separate contracts between exporters from Poland and legal entities-residents of Ukraine.

It should be noted that under this loan agreement, Ukravtodor should receive 68 million euros (development of road infrastructure on the approaches to 6 checkpoints on the Ukrainian-Polish state border); the State Customs Service gets 25 million euros (for constructing checkpoints "Sheheni," "Krakovets," "Rava-Ruska"), State Border Guard Service receives 7 million euros (reconstruction of 7 departments of the agency).

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