Draft Law of Ukraine

"On Amendment of the Law of Ukraine "On the State Budget of Ukraine for 2004"

The draft suggests canceling the norm of Article 83 of the Law of Ukraine "On the State Budget of Ukraine for 2004", according to which in 2004 taxation with value added tax (VAT) shall not be imposed on transactions on exporting (transferring) agricultural products (groups 1-24 of the Ukrainian Classification of Commodities for Foreign Economic Activity) outside Ukraine's customs territory.

According to the current legislation of Ukraine, the above-mentioned transactions are taxed at zero rate of taxation basis. Exemption from VAT taxation for export of agricultural products envisages canceling the budget compensation of VAT to subjects of entrepreneurial activity engaged in export of respective products. This, in its turn, will lead to considerable decrease in export volumes of agricultural products.

Preserving taxation for transactions on exporting (transferring) agricultural products outside Ukraine's customs territory in 2004 at zero rate and respectively increasing export volumes of the above-mentioned products will permit bringing the agricultural branch out of the crisis.

The draft almost fully replicates the text of an alternative draft law N 4470, introduced by MP Ye.Zhovtiak.