close
Share with your friends

Draft Law No. 3851

Draft Law No. 3851

Yana Bazia, Attorney-at-law, Senior Tax Consultant, KPMG Law Ukraine

1000

Related content

On 15 September Draft Law No. 3851 related to the establishment of tax preferences for the creative industry was adopted by Parliament in its first reading. What preferences are mentioned in the Draft, and what is your opinion on their establishment?

On 15 September 2020 the Ukrainian Parliament adopted in the first reading the President’s Draft Law On amendments to the Tax Code of Ukraine on the State Support of Culture, Tourism and Creative Industries. As is stated in the Explanatory Note, the purpose of the following Draft Law No. 3851 is to support the cultural spheres, creative industries and tourism sector in order to prevent their stagnation, ensure preservation and create new working places.

The Draft proposes to exempt from corporate income tax and personal income tax income in the form of targeted cultural grants provided for the implementation of a project or program in the fields of culture, tourism and the creative industries sector. Such provisions will obviously help to legalize micro and small businesses in the creative economy, encourage Ukrainian authors to create a quality cultural product with export prospects, and will allow referral for institutional support or financial assistance in the development of their own projects and for individuals to obtain personal grants.

Cutting VAT is also contemplated from 20% to 7% for performance shows (theatre, opera, ballet, circus, music, sound and others), performances of professional art groups, actors and artists, cinematic premieres, cultural and artistic events, showing original of musical works, individual and group excursions to museums, zoos and reserves, visiting their territories and objects by visitors. This amendment will also apply to the distribution, screening, public showing of films adapted into Ukrainian-language versions for the visually impaired and hard of hearing.

The Draft envisages the establishment of a reduced VAT rate of 7% till 1 January 2023 for temporary accommodation services provided by hotels, hostels and other similar facilities affected by the fall in tourist flows due to quarantine.

The adoption of Draft Law No. 3851 and the cut in VAT for the tourism industry would help to stimulate investment and may contribute to additional budget revenues. The potential increase of tourist flows would also probably lead to the creation of new jobs.

Yana Bazia,  Attorney-at-law, Senior Tax Consultant, KPMG Law Ukraine

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal