A new UAH 15 billion ($525 million) Ukrainian coronavirus aid package that provides for grants and tax relief will mainly support entrepreneurs and businesses hit hard by lockdowns.
The Ukrainian parliament (Verkhovna Rada) approved the measure December 4.
The government plans to reimburse some taxes paid by around 120,000 small businesses, temporarily waive taxes for 200,000 entrepreneurs, and issue tax relief to around 4 million businesses, Reuters reported.
The law expands the scope of COVID-19 funds by providing assistance to businesses so they can keep workers on the books, pay social contribution taxes, and stay afloat during a lockdown in which they will lose income, according to a December 4 parliament release.
The law allows some businesses and entrepreneurs to delay outstanding tax debts of no more than UAH 6,800 until December 29, 2021. It also allows taxpayers to write off tax debts not exceeding UAH 3,060 if they were not repaid by November 1 and waives fines and penalties if taxpayers pay debts within six months of the passage of the law.
Any government funds received as a result of the law will not be subject to personal or corporate income tax, according to a separate parliament release. The government will allow entrepreneurs to delay payment of tax debts and associated penalties for six months on income made between January 1, 2017, and December 1, 2020, the release says.
Ukraine is looking at imposing a strict lockdown in January to lighten the load for overburdened health systems dealing with an uptick in coronavirus patients. As of December 4, Ukraine had reported over 780,000 COVID-19 cases since March, with over 15,000 new cases reported the day before. In November the government imposed a lockdown, but it walked back the measure in December after protests from businesses.
Ukraine adopted tax measures in March that exempt from VAT medical goods and equipment necessary to combat COVID-19. In April, the government passed measures allowing corporate taxpayers to deduct from their income COVID-19-related expenses and suspending penalties for failure to pay tax (except VAT) between March 1 and May 31.