The agricultural sector is an integral part of the Ukrainian economy and is becoming even more important in the context of post-war recovery.
Legislative changes that took effect in 2024-2025 have opened new avenues for the agrarians to expand their businesses, particularly, in terms of financing, support for small agricultural enterprises, enhanced environmental standards and modernizing technologies.
Please find below a detailed overview of the legislative changes and their impact on the industry.
By pledging agrarian notes that now confirm their commitment to deliver a certain amount of products, farmers can receive funds from investors to buy fertilizers or machinery.
Please be advised that the Law of Ukraine “On Agrarian Notes” will be in effect in conjunction with the existing Law “On Agrarian Bonds”. This will allow market participants to choose between the two financial instruments.
Specifically, the selling price of extracted minerals (mineral raw materials) included in a mining company’s commercial products classified under the code UKTZED 2517 is determined by the weighted average selling price (by sales volume) of the relevant type of commercial products of the mining company during the reporting period. However, this price cannot be less than USD 6.5 per ton.
Legislative changes of this nature are not expected to have a significant impact on most mining companies. These companies are organized around the extraction and primary processing of mineral raw materials, as well as the manufacture of commercial products in compliance with the standards and requirements for subsoil use, market pricing principles and business competitiveness.
Conversely, agricultural enterprises extracting water or sand for production may experience an increase in their tax obligation. For instance, the cost of water resources will rise due to the new calculation coefficients.
This will encourage farmers to adopt greener technologies, but it will also require additional investments in modernization.
This decision is intended to streamline the business environment for exporters and alleviate their administrative burden.
The minimum prices are calculated using data from the State Customs Service and are updated on a monthly basis.
On January 31, 2025, the concept of the State Targeted Economic Program Development of Livestock was approved for the period up to 2033, as outlined in the Decree of January 31, 2025 No. 76-r.
The documents outline measures to implement strategic goals, including Ukraine’s European integration.
The proposed amendments will contribute to the digitalization of administrative services in the field of quarantine and plant protection. Specifically, the amendments will establish clear regulations for the operation of the Public Health Information System (PHIS). These regulations will define the owner, administrator, technical administrator, users, access procedures to PHIS, the option to create a personal user account, and the use of QR codes on phytosanitary certificates.
The amendments aim to reduce barriers to international trade in agricultural products by introducing the electronic exchange of phytosanitary certificates and phytosanitary certificates for re-export in electronic form (ePhyto) between national plant protection organizations. The ePhyto exchange will be defined in detail through the interaction of PHIS and the international centralized information system (ePhyto HUB).
In particular, the procedure for calculating the minimum tax liability (MTL) for owners and tenants of agricultural land has been changed.
The main changes are:
These changes are intended to ensure fairer and more efficient taxation of agricultural land and to increase budget revenues.
The Cabinet of Ministers adopted the resolution No. 1407 “On Amendments to the Procedure for Utilizing Funds Allocated in the State Budget to Support Farms and Other Agricultural Producers” on December 10, 2024.
Farmers will be eligible to receive such assistance:
European integration regulations were adopted, for example:
The objective of these changes is to align Ukrainian legislation with the European standards and to ensure the sustainable development of the agricultural sector.
The 2024-2025 legislative changes in Ukraine’s agricultural sector are a significant milestone that will contribute to the growth of a competitive and efficient agricultural sector.
However, it is important to note that the success of these changes will depend on their timely and high-quality implementation, as well as on the active participation of all agricultural market participants in this process.
BDO in Ukraine actively supports agricultural businesses through consulting on current changes in legislation and helping to implement the best practices to achieve sustainable development. We constantly monitor legislative changes and are prepared to help your business to adapt effectively to the new environment. Contact us for assistance and advice on doing business in the agricultural sector!
Please find below a detailed overview of the legislative changes and their impact on the industry.
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The introduction of agrarian notes
By pledging agrarian notes that now confirm their commitment to deliver a certain amount of products, farmers can receive funds from investors to buy fertilizers or machinery.
Please be advised that the Law of Ukraine “On Agrarian Notes” will be in effect in conjunction with the existing Law “On Agrarian Bonds”. This will allow market participants to choose between the two financial instruments.
-
Rent for the use of subsoil
Specifically, the selling price of extracted minerals (mineral raw materials) included in a mining company’s commercial products classified under the code UKTZED 2517 is determined by the weighted average selling price (by sales volume) of the relevant type of commercial products of the mining company during the reporting period. However, this price cannot be less than USD 6.5 per ton.
Legislative changes of this nature are not expected to have a significant impact on most mining companies. These companies are organized around the extraction and primary processing of mineral raw materials, as well as the manufacture of commercial products in compliance with the standards and requirements for subsoil use, market pricing principles and business competitiveness.
Conversely, agricultural enterprises extracting water or sand for production may experience an increase in their tax obligation. For instance, the cost of water resources will rise due to the new calculation coefficients.
-
Increase in environmental tax rates
This will encourage farmers to adopt greener technologies, but it will also require additional investments in modernization.
-
Support for small farming enterprises
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Abolishment of export licenses for certain types of agricultural products
This decision is intended to streamline the business environment for exporters and alleviate their administrative burden.
-
The introduction of minimum export prices for agricultural products
The minimum prices are calculated using data from the State Customs Service and are updated on a monthly basis.
-
Approval of strategic documents for agricultural development
On January 31, 2025, the concept of the State Targeted Economic Program Development of Livestock was approved for the period up to 2033, as outlined in the Decree of January 31, 2025 No. 76-r.
The documents outline measures to implement strategic goals, including Ukraine’s European integration.
-
Digitalization of phytosanitary procedures
The proposed amendments will contribute to the digitalization of administrative services in the field of quarantine and plant protection. Specifically, the amendments will establish clear regulations for the operation of the Public Health Information System (PHIS). These regulations will define the owner, administrator, technical administrator, users, access procedures to PHIS, the option to create a personal user account, and the use of QR codes on phytosanitary certificates.
The amendments aim to reduce barriers to international trade in agricultural products by introducing the electronic exchange of phytosanitary certificates and phytosanitary certificates for re-export in electronic form (ePhyto) between national plant protection organizations. The ePhyto exchange will be defined in detail through the interaction of PHIS and the international centralized information system (ePhyto HUB).
-
Taxation system changes
In particular, the procedure for calculating the minimum tax liability (MTL) for owners and tenants of agricultural land has been changed.
The main changes are:
o The introduction of a fixed coefficient “K” equal to 0.057. This coefficient will be used to calculate the MTL in 2025 and subsequent years.
o The procedure for determining the value of land for tax purposes has been changed.
These changes are intended to ensure fairer and more efficient taxation of agricultural land and to increase budget revenues.
-
State support for agrarians
The Cabinet of Ministers adopted the resolution No. 1407 “On Amendments to the Procedure for Utilizing Funds Allocated in the State Budget to Support Farms and Other Agricultural Producers” on December 10, 2024.
Farmers will be eligible to receive such assistance:
o a budget subsidy of UAH 4 thousand per unit (1 hectare) for agricultural activities;
o a special budgetary subsidy of UAH 7 thousand for keeping cows across all productivity categories;
o a special budget subsidy of UAH 2 thousand for keeping goats and/or sheep.
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Other changes
o Veterinary medicine and food security.
o Production of seeds and seedlings.
o Protection of plant variety rights.
European integration regulations were adopted, for example:
o The Law of Ukraine “On Grapes, Wine and Viticulture Products” of 22.08.2024 No. 3928-IX.
o Draft Law of Ukraine “On Ukraine’s Accession to the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing”.
o Draft Law of Ukraine “On the Attraction of Investments in the Development of the Fishing Industry”.
o Draft Law on the State Regulation of Plant Protection.
o Other bills and acts aim to implement European directives and regulations. They create a legal framework for self-governing public organizations in the agricultural sector and establish a payment agency.
The objective of these changes is to align Ukrainian legislation with the European standards and to ensure the sustainable development of the agricultural sector.
The 2024-2025 legislative changes in Ukraine’s agricultural sector are a significant milestone that will contribute to the growth of a competitive and efficient agricultural sector.
However, it is important to note that the success of these changes will depend on their timely and high-quality implementation, as well as on the active participation of all agricultural market participants in this process.
BDO in Ukraine actively supports agricultural businesses through consulting on current changes in legislation and helping to implement the best practices to achieve sustainable development. We constantly monitor legislative changes and are prepared to help your business to adapt effectively to the new environment. Contact us for assistance and advice on doing business in the agricultural sector!
