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Corporate PPAs (Power Purchase Agreements) are gaining popularity not only worldwide, but also in Ukraine. These are direct contracts under which electricity from renewable sources is sold not to the government, as was the case under the “green” tariff, but directly to private companies – end consumers. EU countries and the US have been moving away from government subsidies for renewable energy in favor of market mechanisms for a while now. According to BloombergNEF, 183 corporate PPAs were signed in the US in 2024 alone – nearly twice as many as the previous year. For Ukraine, this model is especially relevant given that the “green” tariff is only valid until 2030 and no longer applies to new industrial facilities (except in a few cases explicitly set out by law). It’s also becoming more attractive due to the ongoing financial instability in the energy sector. Benefits of PPAs in the Ukrainian Context Corporate PPAs primarily provide predictability and stability. These contracts are typically signed for 10 to 20 years and lock in the electricity price, helping businesses avoid market fluctuations. Beyond price stability, long-term PPAs also ensure a reliable power supply – a crucial factor given Ukraine’s recent energy challenges, especially after years of widespread blackouts. PPAs also serve as confirmation of a project’s financial viability, which is key for banks and investors when deciding on funding. For businesses committed to sustainability, PPAs help reduce CO₂ emissions, improve ESG ratings, and enhance corporate reputation. On top of that, they open the door to instruments like guarantees of origin and carbon credits – and that’s just the beginning. Regulatory framework: is it already working? Law No. 3220-IX has enabled renewable energy producers to enter into bilateral agreements without mandatory auctions. Regulatory restrictions on the term of such agreements have also been lifted, allowing long-term contracts to be signed even at the project development stage. Producers can leave the Guaranteed Buyer balancing group and operate on the open market, while retaining the right to return to the state model. Therefore, the legal landscape is already in place – all that remains is to use it effectively. ESG, guarantees of origin, carbon credits – how does this relate to PPAs? Guarantees of origin are electronic documents that officially confirm electricity was generated from renewable sources. This mechanism is already in place in Ukraine and is essential for access to EU markets. ESG principles refer to a business’s responsibility in environmental, social and governance matters. Investors and partners are increasingly demanding compliance with these standards – and purchasing electricity from renewable energy sources through PPAs is a concrete way to confirm your environmental friendliness. Carbon credits or emissions trading system – a system in which companies receive CO₂ emission limits: surpluses can be sold, shortages can be purchased. From 2025, Ukraine will reinstate the obligation to report emissions, and the launch of the emissions trading system itself is expected in 2028. Accordingly, entering into PPAs with renewable energy producers allows businesses to meet ESG requirements, obtain guarantees of origin, and prepare for new climate regulatory requirements. Practical aspects of concluding a PPA After considering the general principles of corporate PPAs, it is worth moving on to the the practicalities of putting them into action. First of all, this concerns the terms and conditions of the sale and purchase of electricity, which must be clearly regulated in the contract. If the electricity seller operates under the PPA model, it is important to stipulate in the contract the buyer's obligation to purchase the entire volume of electricity produced, except for that consumed for the station's own needs. The actual conclusion of the contract for a specific trading day is confirmed by the synchronous submission of identical daily volumes of electricity through the electronic platform of the transmission system operator – NPC Ukrenergo. In this regard, the contract must provide for an agreed procedure for coordinating the daily supply schedule, specifying the deadlines, responsible persons and methods of communication. Equally important is defining the moment when ownership of the electricity is transferred. In Ukrainian practice, this usually happens when the transmission system operator confirms the registration of the contract. From this moment, all risks associated with the ownership, use and disposal of electricity, as well as responsibility for compliance with market rules, are transferred to the buyer. Pricing within the PPA is one of the most sensitive issues. Usually, a model based on the day-ahead market is used, with simultaneous determination of price limits – minimum and maximum. This allows maintaining a balance between protecting the interests of the parties and flexibility in market conditions. The contract should also clearly outline the timing and procedure for payments, in line with tax law requirements. Given the long-term nature of PPAs, it is worth providing for the seller's right to temporarily suspend electricity supply in the event of a breach of payment discipline, failures in volume registration or default by the buyer. The conditions for such suspension must be clearly spelled out and agreed upon by the parties in advance. The contract separately regulates both planned and emergency maintenance – including notification procedures, shutdown schedules, and deadlines for resolving technical issues. This helps avoid disputes and interruptions at the energy facility. The parties must hold all licenses, agreements, and technical documents required under the Electricity Market Rules. It is also necessary to provide for the seller's right to suspend electricity supply in the event of disruptions in the transmission or distribution system, including during maintenance, without applying sanctions. Particular attention should be paid to regulating liability for imbalances – the financial consequences of deviations between the forecast and actual volume of electricity supply. Moreover, the issue of regulating imbalances is an essential condition of the contract. There are also specific points to consider around the contract duration. It all depends on the stage of project implementation. While the agreement is formally in force from the date of signing, actual electricity delivery usually begins only once the facility has been commissioned for commercial operation – that is, once all technical conditions have been met and supply can physically take place. Altogether, these provisions form the backbone of a well-functioning and predictable corporate PPA. Challenges and solutions Despite its benefits, the PPA market in Ukraine still faces a number of challenges. The biggest issue is the lack of a guaranteed long-term buyer (offtaker) willing to purchase large volumes of electricity. Green auctions have not been implemented at scale, and the private PPA market is developing slowly due to a shortage of creditworthy buyers. In particular, green auctions with state support do not enjoy investor confidence, due to both procedural imperfections and the risk of non-fulfilment of obligations on the part of the state. The current “contract for difference” model used in green auctions is unattractive to investors, as auction prices are often lower than market prices. The “contract for difference” mechanism provides that the state guarantees a fixed price to the producer, compensating for the difference in the event of a market decline. A transition to a “market premium” model is being discussed, where the producer sells the electricity itself and the state only pays extra when prices are low. Let us turn our attention to quotas. Investors working in Ukraine have much larger construction projects than the quotas currently offered in auctions. This significantly reduces the possibility for large projects to win. Conclusion Corporate PPAs are not just a trend, but a real tool for transitioning to a sustainable, competitive and energy-independent economy. They open up new opportunities for both energy producers and consumers, allowing them to combine economic efficiency with social and environmental responsibility. A well-structured agreement, supported by professional guidance, is the key to making the most of this instrument in the Ukrainian context. Authors: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate Law and M&A practice, Attorney at law; Khrystyna Zimenko, Associate at Corporate Law and M&A practice at GOLAW; Vladyslava Zaichko, Paralegal at Corporate Law and M&A practice at GOLAW.

On 5 August 2025, the National Bank of Ukraine adopted resolution No. 95, which significantly amends the rules on foreign exchange operations for corporate clients and foreign investors. Key changes in foreign exchange regulation Resolution of the NBU board No. 95 of 5 August 2025 marks another step is easing the wartime foreign exchange restrictions introduced by resolution No. 18 of 24 February 2022. The new rules are aimed at stimulating investment and increasing the foreign exchange flexibility of Ukrainian businesses, while maintaining the necessary control mechanisms. Dividend repatriation One of the most important innovations concerns the payment of dividends abroad. Residents will now be able to partially repatriate dividends for the period of activity starting from 1 January 2023. The monthly limit of EUR 1 million remains unchanged. According to the NBU, the current overall limit prevents a significant increase in demand for foreign currency, while allowing dividend repatriation will strengthen foreign investors’ confidence and stimulate the inflow of new capital into Ukraine. Funds transferred abroad in the form of dividends may also be used for other purposes, including repayment of debt obligations. New risk management instruments Resolution No. 95 considerably expands the possibilities for forward transactions. First, clients are now entitled to sell foreign currency to banks for hryvnia on forward terms without the need for physical delivery of the underlying asset. Second, residents are permitted to purchase foreign currency from a bank on a forward basis for the purpose of hedging exchange rate risks in import transactions. At the same time, restrictions have been set for banks: they may not increase their net long foreign currency position, so such forward transactions are possible only within the amount of currency the bank has itself purchased on a forward basis from its clients. These innovations provide corporate clients with more tools to manage currency risks but also require the establishment of internal accounting and control for forward contracts. Simplification of international settlements Following the amendments, residents and non-residents may return erroneously credited foreign currency funds within three working days of the bank receiving the relevant notice. This increases the confidence of foreign partners, as their funds will not be blocked without the possibility of return. The establishment of a three-day period for returning erroneously credited foreign currency significantly improves the predictability of foreign exchange operations and reduces reputational risks for banks. This change sends an important signal to foreign partners about the normalisation of foreign exchange regulation and alleviates concerns about the “freezing” of assets in the event of technical errors. Greater flexibility in servicing external credits The approach to servicing external borrowings has been substantially revised. Now, under loans from a pool of foreign creditors, enterprises may repay debt not only in favour of IFIs but also to other participants, namely first-tier banks with a rating of at least “A”. This change creates greater flexibility for Ukrainian enterprises in structuring external debt and may contribute to diversifying funding sources, potentially reducing the cost of borrowing through competition, and simplifying debt repayment procedures. At the same time, the imposition of strict rating requirements may limit the range of available banks, especially under martial law, when bank ratings may be downgraded due to war-related risks. Conclusions NBU resolution No. 95 is an important step in the liberalisation of foreign currency regulation, providing businesses with more management. The innovations are particularly beneficial for companies with foreign investors and those actively operating in international markets. However, successful use of the new opportunities requires careful planning, compliance with documentation requirements, and regular monitoring of regulatory changes. Companies should promptly adapt their internal processes to fully benefit from the liberalisation of foreign currency restrictions. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law; Oles Riabchuk, Senior Associate at Corporate Law and M&A practice at GOLAW, Attorney at law; Yaroslav Maltsev, Paralegal at Corporate Law and M&A practice at GOLAW.

The status of a representative office of a foreign company directly affects the taxation of the activities carried out by such a representative office in Ukraine. According to the provisions of the Tax Code of Ukraine, a permanent establishment is a fixed place of business through which the business activity of a non-resident is wholly or partially carried out in Ukraine. Such a place of business may, in particular, consist of a branch, office, factory, workshop, warehouse or premises used for the delivery of goods, server, etc. At the same time, in practice, disputes often arise regarding the qualification of a representative office: whether it performs only non-commercial functions, or actually carries out business activity in Ukraine and, accordingly, should be recognized as a permanent establishment. In this article, we will consider the current approaches of court practice to certain issues regarding the recognition / non-recognition of a non-resident’s representative office as having the status of a permanent establishment. Preparatory and auxiliary activities of a representative office Both domestic and international legislation provides that one of the cases when the business activity of a non-resident carried out through its representative office in Ukraine does not fall under the definition of a “permanent establishment” is when such representative office carries out activities of a preparatory or auxiliary nature. In particular, in the resolution dated February 15, 2024, in case No. 640/35881/21, the Supreme Court noted that when distinguishing core activities from preparatory and/or auxiliary ones, it is necessary to take into account that: preparatory or auxiliary activities must be carried out for the benefit of the non-resident, and not for third parties; core activities are usually perceived as activities that are substantial and significant based on the commercial goals and objectives of the organization; preparatory activity precedes the commencement of the non-resident’s core activity in the territory of Ukraine; auxiliary activity supports the process of conducting the core business activity by the non-resident and is carried out simultaneously with the core activity, but does not qualify as one. At the same time, auxiliary activity may be conducted either on a temporary or on a permanent basis. Thus, in this case, the Supreme Court concluded that, by their nature, the actions of the representative office related to the registration of medicinal products in Ukraine, as well as their subsequent promotion for sale, are of a preparatory and auxiliary nature, since such activities are intended to ensure the possibility of marketing the respective medicinal product in the territory of Ukraine. However, these operations do not necessarily lead to the generation of income in the territory of Ukraine. In the resolution of the Sixth Administrative Court of Appeal dated December 04, 2024, in case No. 640/13698/22, the issue of preparatory and auxiliary activities of a representative office was also examined, in particular taking into account the criterion of receiving / not receiving income from a certain activity of the representative office. The court noted that the activity of a representative office, which does not generate any income for the parent company, cannot, under any circumstances, constitute a significant part of the overall business activity of the enterprise, and therefore has an exclusively auxiliary nature. Duration of a representative office’s activity and expenses for its maintenance Tax authorities often refer to the long duration of a representative office’s activity on the territory of Ukraine, as well as to the significant amount of expenses incurred by the parent company for its maintenance, as circumstances which, in their opinion, indicate that such a representative office meets the criteria of a permanent establishment. At the same time, in the resolution of the Supreme Court dated February 15, 2024, in case No. 640/35881/21, it was concluded that international legislation does not establish specific timeframes after which a representative office acquires the status of a permanent establishment. As a general rule, in order to qualify as a permanent establishment, the activity must be regular, stable, and stationary – that is, carried out at a specific location and with a certain degree of permanence. However, in the opinion of the Supreme Court, the amount of expenses incurred by a non-resident to maintain a representative office may, under certain conditions, be considered a factor supporting the conclusion that such a representative office should be granted the status of a permanent establishment. At the same time, in order to determine whether such expenses are indeed significant, it is necessary to compare the amount of funding allocated to the representative office with the overall amount of funds received by the non-resident from its business activity, also taking into account the specifics of the business sector, market conditions, and other relevant factors in their entirety. A similar approach was also outlined in the resolution of the Sixth Administrative Court of Appeal dated May 05, 2025, in case No. 320/44103/23, which stated that the duration of the representative office’s presence at a specific location, the number of personnel, and the amount of fixed assets available cannot serve as grounds for granting such representative office the status of a permanent establishment, if its activities are limited to purely preparatory and/or auxiliary functions. Identity of activities and the conclusion of contracts on behalf of the parent company Disputes regarding the recognition of a permanent establishment of a foreign company in Ukraine often arise based on the existence of powers of attorney issued to certain individuals by such company, authorizing them to perform a wide range of functions. Tax authorities, as a rule, take into account not the actual actions performed under the power of attorney, but the content of such power of attorney itself. Thus, in the resolution dated July 04, 2024, in case No. 160/11095/23, the Supreme Court identified the following features of a permanent establishment, which may be applied either simultaneously or separately: the representative office carries out activities that are wholly or partially identical to the core activity of the non-resident; a person (other than an agent with an independent status) acts on behalf of the company and uses authority in the contracting state to conclude contracts on its behalf. In order to avoid recognition of identity between the activities of the parent company and those of the representative office, the latter’s activities must differ from the statutory functions of the parent company. Regarding the second feature, it is worth noting that the prevailing position remains that issuing a power of attorney with broad powers (including authority to conclude any contracts related to the non-resident’s activity) is not sufficient grounds for concluding that the representative is performing the functions of a permanent establishment. Conclusions regarding the performance of permanent establishment functions must be based directly on the analysis of the actual actions performed by such representative, rather than on the content of the power of attorney (resolution of the Supreme Court dated December 21, 2022, in case No. 200/7051/20-а, resolution of the Second Administrative Court of Appeal dated October 10, 2024, in case No. 440/18088/23, resolution of the Third Administrative Court of Appeal dated January 09, 2024, in case No. 160/9196/23). Engaging in investment activity Court practice sometimes reflects the view that the purchase and sale of corporate rights and other investment activities carried out by a non-resident’s representative office are not considered grounds for recognizing the representative office as a permanent establishment, even if such activities correspond to the activities of the parent company. However, in a recent resolution of the Supreme Court dated March 20, 2025, in case No. 280/4264/21, it was concluded that, according to the provisions of international and domestic legislation, investment activity is one of the types of business activity. In particular, for professional investors, such activity may constitute core business activity and a source of independent income. Therefore, in the opinion of the Supreme Court, it is important to distinguish whether the representative office is conducting investment activity as an independent (core) type of business activity, or whether it has an auxiliary nature related to supporting or developing the core activity. Thus, considering that in this case the representatives of the foreign company were carrying out investment activity (primarily concluding contracts for the purchase and sale of shares in Ukrainian companies) on behalf of the foreign company, and such activity was also identical to the core activity of that company, the representative office was recognized as a permanent establishment. Conclusion In conclusion, it should be noted that the determination of the status of a non-resident’s representative office in Ukraine is of significant importance for tax consequences and, in practice, often presents challenges. In general, as the analysis of court practice shows, courts go beyond a formal analysis and focus on the actual substance of the representative office’s activity. Therefore, foreign businesses should take the above-mentioned approaches into account when planning their activities in Ukraine in order to minimize the risks of tax disputes, additional tax assessments, and other negative consequences. Authors: Viktoriia Bublichenko, Partner, Head of Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Tetiana Fedorenko, Senior Associate at Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Anna Kostsova, Paralegal at Tax, Restructuring, Claims and Recoveries practice at GOLAW