The Cabinet of Ministers proposes to exempt from VAT payment the transactions for the supply of goods/services in the customs territory of Ukraine, which are carried out directly by Polish contractors and their offices in Ukraine in accordance with contracts concluded for projects to build and equip state border guards units, international road checkpoints, projects for construction, reconstruction and overhaul of roads in the western region in the framework of the Agreement between the Government of Ukraine and the Government of the Republic of Poland on granting loans on the terms of tied assistance dated 09.09.2015, ratified by the Law of Ukraine "On Ratification of the Agreement between the Government of Ukraine and the Government Poland on granting a loan on the terms of tied assistance."

The relevant decision is recorded in the draft Law of Ukraine "On Amendments to the Tax Code of Ukraine on the Value Added Tax Rate on Certain Transactions for the Period of Implementation of the Agreement between the Government of Ukraine and the Government of the Republic of Poland on Loan Assistance and Other Issues of Public Debt", which was supported at the Government meeting on August 19, 2020.

The text of the draft reads that the application of the zero VAT rate is temporary and will be valid only for the period of implementation of the Agreement between the Government of Ukraine and the Government of the Republic of Poland on granting a loan on the terms of tied assistance of 09.09.2015.

That will give an impetus to the intensification of cooperation between Ukraine and the Republic of Poland and will allow unblocking the implementation of infrastructure development projects at checkpoints in the western region of Ukraine.