Environmental tax is an effective way to regulate the activities of organizations that release pollutants into the environment during their operations. Its amount depends on the volume of emissions into the atmosphere, water, soil, as well as the amount of waste generated. In this article, we will examine the features of the environmental tax in Ukraine, who the payers are, how the calculation is carried out, and the current tax rates in 2025.
What is Environmental Tax
Environmental tax is a mandatory national payment that is charged on actual volumes of various emissions, discharges, and waste placement in the environment. The tax covers types of activities that are accompanied by:
- emission of toxic chemicals into the air from stationary polluting objects;
- discharges of pollutants directly into water bodies;
- waste placement (except for the placement of certain types of waste as secondary raw materials);
- generation and temporary storage of radioactive waste.
According to paragraph 240.1 of the Tax Code of Ukraine, the tax is paid for:
- emission of hazardous impurities into the air from stationary pollution points;
- storage of radiation waste by manufacturing enterprises exceeding the terms established by license conditions;
- waste placement;
- generation of radioactive waste;
- temporary storage of radioactive waste by their producers beyond the period established by special license conditions.
Eco-tax for carbon dioxide (CO2) emissions into the atmosphere is charged only if their annual volume exceeds 500 tons.
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Environmental Tax Payers
Environmental tax payers are economic entities, legal entities, budgetary institutions, public and other enterprises and organizations that carry out activities associated with negative environmental impact. These can be enterprises, individual entrepreneurs, including single tax payers, and representative offices of non-residents.
The responsibility for paying eco-tax does not depend on the form of ownership or type of activity. For example, agricultural producers who use pesticides or fertilizers must also pay tax for soil and water pollution.
Entities that have stationary sources of pollution are also considered environmental tax payers. These include not only real estate objects (workshops, boiler houses, installations, etc.), but also mobile technical means – generators, mini power plants, gas welding equipment that run on fuel. Since they temporarily maintain their coordinates during operation, they are considered stationary emission sources.
Pollutant Codes for Environmental Tax
The pollutant codes for environmental tax are specified in Appendix 7 to the Environmental Tax Declaration. These include:
- 243.4.001 – carbon dioxide (CO2);
- 243.1.001 – nitrogen oxides (NOx);
- 243.1.003 – sulfur dioxide (SO2);
- 243.1.002 – ammonia (NH3);
- 243.1.008 – hydrogen chloride (HCl);
- 243.1.019 – hydrogen sulfide (H2S);
- 243.1.016 – ozone (O₃).
The payer independently determines the list of pollutant codes that are emitted or discharged as a result of their activities and indicates them in the declaration.
In addition to codes, it is important to correctly determine the hazard class of substances. It affects the rate: the higher the class, the higher the tax. Hazard classes are determined by special methodologies, lists, and hygienic regulations. For example:
- soot – hazard class III;
- non-methane volatile organic compounds – class IV;
- nitrogen oxides calculated as nitrogen dioxide – class IV.
Therefore, when calculating the eco-tax, it is important to use approved regulatory documents regarding the hazard classes of pollutants.
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How to Calculate the Amount of Environmental Tax
The calculation of environmental tax is carried out according to the formula:
Tax amount = Emission volume × Tax rate
The emission volume is determined by the payer independently based on primary accounting data. The methodology for calculating the volume of pollutant emissions is approved by the order of the State Statistics Committee.
For example, when burning 500 tons of coal, the calculation of the environmental tax amount for carbon dioxide emissions will be:
- Actual CO2 emission volume = 0.000001 × 93740.0 × 500 × 20.47 = 958.43 tons.
- CO2 eco-tax amount = 958.43 × 30 UAH/ton = 28,752.9 UAH.
For gasoline and diesel fuel calculations, a different methodology is used, as for vehicles, since diesel generators use internal combustion engines.
The formula for calculating the environmental tax in this case is:
Emission volume = 0.001 × Fuel volume × Average emission indicator
The values of average emission indicators of pollutants for different types of fuel are given in special methodologies of the State Statistics Committee.
The amounts of tax liabilities are calculated separately for each type of pollutant and then summed up. Rounding of indicators is carried out to three decimal places.
For correct tax calculation, the payer also needs to have data on:
- list of pollutants generated as a result of activities;
- volumes of actually used fuel;
- lower heating value of fuel;
- emission coefficients of pollutants.
Such data may be contained in permit documentation (if it was issued) or determined based on equipment passports, standards, and methodologies.
The calculation of eco-tax is quite complex and requires special technical knowledge. Therefore, for correct calculation, it is worth involving specialists – ecologists, engineers – who can provide all the necessary information.
Exemption from Environmental Tax Payment
Exemption from environmental tax payment is granted to enterprises that:
- use their own territories for storing waste as secondary materials;
- belong to the nuclear energy industry and have concluded agreements on returning ionizing radiation sources outside of Ukraine;
- emit carbon dioxide, but not more than 500 tons per year.
Also, individuals who are not registered as entrepreneurs do not pay the tax.
Placing waste on one’s own territory as secondary raw materials is only possible with a special permit and in compliance with standards and norms. The waste must be accounted for and intended for further use in production or sale. Otherwise, this business is an environmental tax payer.
Enterprises belonging to the nuclear energy sector are exempt from eco-tax only for those radioactive wastes that are returned outside of Ukraine according to concluded agreements. This privilege does not extend to other types.
To take advantage of the exemption from payment for CO2 emissions not exceeding 500 tons per year, the payer needs to submit an application for the absence of a taxable object and a calculation of emissions. The calculation should be accompanied by materials of CO2 emissions inventory for all stationary pollution sources.
Environmental Tax in Ukraine
The legislation regarding environmental tax in Ukraine is constantly changing for improvement. In particular, from January 1, 2024, the gradual increase in rates, which began in 2022 and will continue until 2025, continues.
In 2024, the rate for carbon dioxide emissions was 30 UAH per 1 ton. Data for other pollutants can be found in the relevant paragraphs of the Tax Code of Ukraine. They vary depending on the maximum permissible concentration of chemical compounds in the environment and the level of waste hazard.
During martial law, there are certain relaxations regarding the payment of environmental tax, including exceptions such as exemption from taxation for the use of diesel generators and rotary energy converters that provide critically important infrastructure or household needs. Also, the tax is not charged for activities carried out in occupied territories or in active combat zones where it is impossible to ensure proper control over environmental consequences.
Conclusion
Environmental tax is an important tool for controlling the activities of enterprises that are accompanied by emissions of harmful substances. It is paid by business entities depending on the volume and types of pollution. The legislation is constantly changing, particularly regarding rates, so payers should monitor current information.
The online installment service WEAGRO comes in handy for agricultural producers to purchase environmental equipment, as it allows them to quickly obtain the necessary equipment or services with deferred payment without unnecessary bureaucracy. This helps implement modern technologies that reduce negative environmental impact.
