Peculiarities of environmental tax collection in 2024

Pursuant to subparagraph 14.1.57 of the TCU, the environmental tax (hereinafter referred to as the Tax) is a national 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 before April 1, 2009 (hereinafter referred to as Generation).

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, in the course of activities of which Emissions are carried out on the territory of Ukraine and within its continental shelf and exclusive (maritime) economic zone (includingincluding carbon dioxide emissions, hereinafter referred to as "CO2 emissions"), Discharges, Disposal, Formation and Temporary Storage (paragraph 240.1 of the TCU).

The Code provides that if a taxpayer does not plan to carry out Emissions, Discharges, Disposals, and 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 (paragraph 250.9 of the TCU).

The tax liabilities for the Carbon Pollution Tax arise for business entities with aggregate annual carbon pollution emissions exceeding 500 tons (clause 240.7 of the TCU).

The tax liabilities for the Emissions Tax for the period from January 1, 2024 to December 31, 2024 inclusive shall be calculated at the rate of 90 percent of the rate specified in paragraphs 245.1 and 245.2 of the TCU (paragraph 37 of subsection 5 of the Transitional Provisions of the TCU).

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% 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 on 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.

The forms of the environmental tax return and annexes thereto (hereinafter referred to as the "Declaration") were approved by Order of the Ministry of Finance No. 715 dated August 17, 2015, as amended by Order of the Ministry of Finance No. 488 dated September 07, 2023 "On Approval of Amendments to the Form of the Environmental Tax Return".

According to the amended forms of the Declaration and Annexes, the Taxpayers are obliged to declare tax liabilities for the Tax starting from the reporting period of the fourth quarter of 2023, subject to the provisions of paragraph 250.2 of the Tax 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 controlling authority at the location of stationary sources of Emissions, Dioxide Emissions, Discharges; and specially designated places or facilities for Disposals;

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

Since the Tax in the part of Emissions is levied separately for Dioxide Emissions, which is credited to the special fund of the State Budget, we draw the attention of the Taxpayers to the obligation to fill in two separate Annexes 1 to the Declaration.