On 1 April 2012 the Law of Ukraine "On Amendments to Subsection 4 of Section XX ‘Transitional Provisions’ of the Tax Code of Ukraine Regarding Corporate Profit Tax” No.4453-VI dated 23 February 2012 came intoforce.

The Law has introduced amendments to the grounds and procedure for applying temporary tax benefits for income derived from certain types of business activities listed in paragraphs 15-19 of Subsection 4 of Section XX “Transitional Provisions" of the Tax Code (activities related to biofuel, coal methane, renewable energy sources, hotel business, ship- and aircraft construction, machinery for agriculture, publishing, national film production etc.).

Amendments regarding activities covered by the tax benefit:

1. The tax exemption covers income derived from the core activity of the
   electric power industry companies that produce energy solely from
   renewable sources. Previously the tax benefit covered income from sale
   of electricity produced from renewable sources.

Amendments regarding procedure for applying the tax benefit:

1. "Released funds" (previously "funds released from taxation") are
   defined as the amount of tax that remains at the taxpayer’s disposal as
   a result of the tax benefit.
2. The released funds may be used to develop production facilities
   (previously only for re-equipment) and to repay loans used for
   designated purposes obtained before the enactment of the Tax Code
   and payment of interest on these loans. In case of refinancing, only
   repayments of/interest on the refinancing loan should be taken into
   account for the purpose of the tax benefit.
3. The tax benefit covers foreign exchange differences occurring as of the
   date of debt repayment/performance of obligations.
4. The term for utilizing the released funds is limited to three years.