Ukraine Lifts Import VAT and Customs Duties from Certain Energy-Generating Equipment

One recently adopted measure exempts energy-generating equipment imported into Ukraine from VAT and customs duties. These measures were implemented by Laws of Ukraine No. 3854-IX and No. 3853-IX dated July 16, 2024, which entered into force on July 27, 2024.

VAT and customs duties exemption

Temporarily, for the duration of martial law in Ukraine—which was introduced on February 24, 2022—but no later than January 1, 2026, goods that have been classified under the following codes under the UKT ZED and imported into the customs territory of Ukraine for free circulation (this includes goods transported (sent) into the customs territory of Ukraine in international postal and express shipments) are exempt from import VAT and import duties:

• 8406 [Steam turbines and other turbines] (except 8406 10 00 00)
• 8410 [Hydraulic turbines, water wheels and regulators for them] (only hydraulic turbines and their parts)
• 8483 40 21 00 [Cylindrical and helical gears]
• 8502 20 40 90 [Electric generator installations with spark-ignition piston engines with a power output of more than 7.5 kVA but not more than 375 kVA other than ones for civil aviation]
• 8502 20 60 90 [Electric generator installations with spark-ignition piston engines with a power output of more than 375 kVA but not more than 750 kVA other than ones for civil aviation]
• 8502 20 80 90 [Electric generator installations with spark-ignition piston engines with a power output of more than 750 kVA other than ones for civil aviation]
• 8411 [Turbojet, turboprop, and other gas turbines] (except turboprop and turbojet engines and their parts)
• 8501 64 00 00 [Electric generators of alternating current (synchronous generators) with a power output of more than 750 kVA]
• 8504 40 84 00 [Inverters with a power output not exceeding 7.5 kVA] (except inverter welding machines)
• 8504 40 88 00 [Inverters with a power output exceeding 7.5 kVA] (except inverter welding machines)
• 8504 40 90 00 [All other inverters than mentioned above] (except inverter welding machines)
• 8507 60 00 00 [Electric batteries, including separators for them, rectangular (including square) or any other shape, Lithium-ion] (except energy storage installations with a capacity of less than 300 W of alternating and/or direct current and individual lithium-ion cells with a capacity of less than 200 Ah)
• 8541 43 00 00 [Photovoltaic cells, assembled in modules or made into panels]
• 8537 [Boards, panels, consoles, desks, distribution boards, and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, and numeric control apparatus, other than switching apparatus of heading 8517] (except 8537 10 98 10)
• 8503 00 99 00 [Parts intended exclusively or mainly for machinery of heading 8501 [motors and generators, electric] (other than electric generating installations) or 8502 [electric generating installations and rotating electrical converters] (only for wind-power generating installations).

Notably, a wind turbine as a one object (code under UKT ZED 8502 31 00 00) has not been exempted from VAT and import duties. So, under the implemented measures only its certain parts are entitled to the exemption during the import.

Equipment financed by the Energy Community Secretariat

Separately, please note that energy-generating equipment and goods placed under the import customs regime in Ukraine, financed within agreements by the Energy Community Secretariat, will also be exempt from import VAT and customs duties. By the end of August 2024, the Cabinet of Ministers of Ukraine shall determine the list of such equipment and goods with codes according to the UKTZED, as well as establish the procedure for confirming that the import transactions are conducted within agreements financed by the Energy Community Secretariat.

By Maksym Sysoiev, Partner, and Valeria Tarasenko, Tax Consultant, Dentons