Draft Law of Ukraine

"On Amendment and Addition of the Law of Ukraine "On Measures of State Support to Ship-Building Industry"

The draft suggests extending validity of measures of state support to ship-building industry from January 1, 2005, until January 1, 2012.

The draft suggests additions to the Law of Ukraine "On Enterprise Profit Tax", according to which enterprises of ship-building industry, in case there is a negative balance of the object of taxation, shall account such negative balance of the object of taxation separately. Such negative balance shall not be included into gross expenditures and shall be taken into account by such taxpayer in decreasing the object of taxation in subsequent tax periods within 20 calendar quarters form the moment, when such negative balance arises.

Additions to the Law of Ukraine "On Value Added Tax" suggest determining that compensation of value added tax sums for enterprises of ship-building industry will be performed as top priority.

Amendment to the Customs Code of Ukraine N 92-IV of July 11, 2002, suggest permitting temporary import to Ukraine’s customs territory (temporary export outside Ukraine’s customs territory) under the obligation of reverse export:

• sea or river transport means (vessels), imported for repairs;
• equipment and component parts for vessels and other sea and river transport means, which are transferred by non-resident customers for fulfilling orders under contracts with their further exportation within the vessels or sea (river) transport means finished (repaired) under these contracts.

Profits of residents in foreign currency from export and production of enterprises of ship-building industry are suggested to be included into their currency accounts in authorized banks within the terms for repaying debts mentioned in contracts, but not later than 180 calendar days from the date of customs declaration of products to be exported.

The draft suggests establishing that all participants of the budget process during January 1, 2005, - January 1, 2012, according to procedural requirements of the Budget Code of Ukraine will annually envisage in the Law of Ukraine on the State Budget for a respective year funds from the state budget for providing financial support to enterprises of ship-building industry through the mechanism of cheapening credits.

The draft, if approved, will permit ship-building industry of Ukraine to overcome the difficult situation which is currently observed in the branch and will contribute to continuing positive trends of development and considerable growth of production volumes in this branch.