Peculiarities of environmental tax collection in 2024

The State Tax Service of Ukraine in its letter dated 19.01.2024 No. 1669/7/99-00-04-01-01-07 informed on the peculiarities of environmental tax collection in 2024.

The environmental tax is a nationwide mandatory payment levied on the actual amounts of

• emissions of pollutants into the atmosphere by stationary sources of pollution (hereinafter referred to as "Emissions"),
• discharges of pollutants directly into water bodies (hereinafter - Discharges),
• Waste disposal (except for disposal of certain types (classes) of waste as secondary raw materials disposed of on the own territories (facilities) of business entities) (hereinafter referred to as Disposal),
• the actual amount of radioactive waste temporarily stored by its producers (hereinafter referred to as Temporary Storage), the actual amount of radioactive waste generated and the actual amount of radioactive waste accumulated before April 1, 2009 (hereinafter referred to as Generation) (sub-clause 14.1.57 of clause 14.1 of Article 14 of the Code).

Taxpayers - business entities, legal entities that do not carry out economic (entrepreneurial) activities, budgetary institutions, public and other enterprises, institutions and organizations, permanent establishments of non-residents, including those that perform agency (representative) functions in relation to such non-residents or their founders, during the course of their activities on the territory of Ukraine and within its continental shelf and exclusive (maritime) economic zone (sub-clause 240.1 of Article 240 of the Code):

Emissions (KBC 19010100 and 19011000 (carbon dioxide emissions (hereinafter referred to as "CO2 emissions"));

Discharges (KBC 19010200);

Disposal (KBC 19010300);

Generation (KBC 190010400);

Temporary storage (CCS 19010400).

The Code stipulates that if a taxpayer does not plan to make Emissions, Discharges, Disposal, or Generation during the reporting year, such taxpayer must notify the relevant supervisory authority at the location of the pollution sources and make a statement that it does not have an object of tax calculation in the reporting year (Article 250.9 of the Code).

The tax liabilities for the Carbon Pollution Tax arise for business entities whose aggregate annual carbon pollution emissions exceed 500 tons (Article 240.7 of the Code).

Tax liabilities for the Tax on Discharges that will occur in the period from January 1, 2024 to December 31, 2024 inclusive shall be calculated at a rate corresponding to 90 percent of the rate specified in paragraphs 245.1 and 245.2 of Article 245 of the Code (paragraph 37 of subsection 5 of the Transitional Provisions of the Code).

The composition of revenues of the State Budget of Ukraine has been changed in terms of the distribution of funds from the Tax between budgets (clause 161 of Article 29 of the Budget Code of Ukraine) in terms of revenues from Dioxide Emissions with 100 percent of the funds being credited to the special fund of the state budget (subparagraph 2 of paragraph 4 of Section I of the Law of Ukraine No. 3035-IX "On Amendments to the Budget Code of Ukraine" dated April 11, 2023).

In 2024, the allocation of shares of funds from the Tax to the general fund of the State Budget for Discharges, Emissions and Disposals is maintained at 45 percent and 55 percent to the special fund of local budgets.

The distribution of tax liabilities under the Tax is carried out by the bodies that provide treasury services for budget funds.

The Tax levied for the Generation and Temporary Storage of Radioactive Waste is credited to the special fund of the state budget in full in the amount of liabilities accrued on the amount of radioactive waste temporarily stored beyond the period established by the special conditions of the license.

Since the Emissions Tax is levied separately for Dioxide emissions, which are credited to the special fund of the State Budget, taxpayers should pay attention to the obligation to fill in two separate Annexes 1 to the declaration approved by the Order of the Ministry of Finance of Ukraine dated 17.08.2015 No. 715, registered with the Ministry of Justice of Ukraine on 03.09.2015 under No. 1052/27497 (hereinafter - the "Declaration").

Starting from 2024, the forms of the Declaration and its annexes have been amended to exclude the obligation to charge a penalty (Order of the Ministry of Finance of Ukraine No. 488 "On Approval of Amendments to the Form of the Environmental Tax Declaration" dated 07.09.2023, registered with the Ministry of Justice of Ukraine on 21.09.2023 under No. 1666/40722).

The amended forms of the Declaration and annexes are available in the information database of the State Tax Service "Tax Block" by codes:

30302006 - Tax return (for legal entities);

Annex 1 "Calculation of emissions of pollutants into the atmosphere by stationary sources of pollution" (form 30320106);

Annex 2 "Calculation for Pollutant Discharges Directly into Water Bodies" (form 30320206);

Annex 3 "Calculation for Waste Disposal in Specially Designated Sites or Facilities" (form 30320306);

Annex 4 "Calculation for the generation of radioactive waste (including already accumulated)" (form 30320406);

Annex 5 "Calculation for the generation of radioactive waste and payment for the acquisition of ionizing radiation source(s) (form 30320506);

Annex 6 "Payment for Temporary Storage of Radioactive Waste by its Producers Beyond the Period Established by Special License Terms (form 30320606).

Thus, the Taxpayers are obliged to declare tax liabilities on the Tax using the amended forms of the Declaration and Annexes starting from the reporting period of the fourth quarter of 2023, subject to the provision of paragraph 250.2 of Article 250 of the Code regarding the 40-day period for submission of quarterly reports and the 10-day period for fulfillment of obligations after the reporting deadline.

The declarations are submitted for:

Emissions, Dioxide Emissions, Discharges and Disposals to the unit of the supervisory authority at the location of stationary sources of Emissions, Dioxide Emissions, Discharges; and specially designated places or facilities for Disposals;

Generation, Temporary storage - at the place of the Payer's tax registration with the controlling authorities.