Ukraine establishes tax incentives for foreign and local film producers

Ukraine

On 21 July 2020, the Ukrainian parliament adopted a law aimed at further promoting film production in Ukraine by granting tax incentives to both local and foreign film producers.

The new law is a long-awaited follow-up to another piece of legislation, which entitles foreign filmmakers to receive a cash rebate (compensation) for production costs incurred in Ukraine in the amount varying between 4.5% and 25% of eligible expenses that include direct production expenses such as employee salaries. The exact amount of the rebate will depend on certain criteria and the type of expenses.

According to the latest available draft, the new law creates the following two tax incentives:

  • funds received by a local producer as a cash rebate to be transferred to a foreign producer will be exempted from corporate income tax in Ukraine; and
  • film production services rendered by a Ukrainian producer to a foreign producer will not be subject to VAT in Ukraine.

This article is based on the most recently available text of the law, which may differ from the final version. The law is now waiting to be signed by Ukrainian President and it will come into force after official publication.

Read our previous Law-Now reporting on cash rebates for foreign film producers.

For more information on new incentives for shooting films in Ukraine, contact your regular CMS advisor or local CMS experts Olga Belyakova and Viktoriia Stavchuk.