RES associations call to regulate taxation to stabilize the electricity market

Specialized renewable energy associations, including the UWEA, appealed to the Prime Minister of Ukraine, the Minister of Finance and the Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy to resolve the issue of taxation of electricity market participants.

As explained by the UWEA, as of February 2025, the Ukrainian electricity market is still affected by the existing debt problem. The total debt of NPC Ukrenergo to the participants of the balancing market is more than UAH 17.3 billion, and the debt of market participants to NPC Ukrenergo exceeds UAH 35.7 billion (including VAT). There are also significant debts to renewable electricity producers, who have received only 79.6% of payments for 2024.

Accordingly, RES associations call for certain changes to the tax legislation.

• Extend the cash method of VAT calculation, in particular, extend the cash method of VAT calculation for electricity market participants until January 1, 2028 (instead of January 1, 2026, as provided for by the current legislation). This will help avoid additional tax burden on businesses in the event of delays in payments.
• To restore the provisions of the Tax Code on the application of the cash method for calculating income tax for renewable electricity producers, namely to restore the possibility of paying income tax on a cash basis for renewable electricity producers by January 1, 2028. This will contribute to the financial stability of producers who systematically do not receive payment for the electricity they supply.

The associations emphasize that the proposed changes are critical for stabilizing the electricity market, ensuring the financial balance of market participants and stimulating the development of renewable energy in Ukraine.