Fiscal determinants of the green transformation of the agricultural sector: modelling the impact of tax policy in the context of the European Green Deal

Purpose. The purpose of the article is to determine the role of fiscal instruments in ensuring the ecological transformation of the agricultural sector of Ukraine, considering European integration guidelines and sustainable development objectives. Methodology / approach. The study uses the authors’ analytical approach to assessing the fiscal impact on the “green” transition, which is based on institutional, comparative and content analysis of regulatory legal acts, EU strategic documents, statistical data and scientific sources. Within the framework of the model, fiscal instruments are classified according to their stimulating potential and a qualitative assessment of effectiveness in the context of agricultural greening is applied. Results. The results of the study showed the limited impact of the current tax policy of Ukraine on the greening of agriculture, primarily due to the lack of targeted instruments, weak differentiation and insufficient implementation of the “polluter pays” principle. At the same time, the potential for adapting European approaches to the conditions of the Ukrainian economy has been identified, by transforming environmental taxation, expanding tax benefits and targeted subsidies for environmental measures. Originality / scientific novelty. A conceptual model of the fiscal impact on the green transition in the agricultural sector under a transitional economy is summarised, covering taxes, incentives, and fiscal transfers as tools to promote environmentalisation. An approach is proposed for qualitatively assessing the effectiveness of tax mechanisms, considering the extent of their influence on changing the environmental behaviour of agricultural producers. For the first time, the domestic tax system is examined through the lens of its alignment with the environmental goals of the European Green Deal, identifying functional gaps in national tax regulation. The article also contributes to the development of an interdisciplinary methodology for researching fiscal policy by combining institutional, economic-environmental, and strategic approaches within a single research toolkit. Practical value / implications. The obtained results can be used by government authorities and legislative bodies, in particular by the Ministry of Economy, Environment and Agriculture of Ukraine, the Ministry of Finance of Ukraine, relevant committees of the Verkhovna Rada, industry associations, and research and analytical centres for shaping fiscal policy in the agricultural sector, developing tax incentive instruments for environmentalisation, and adapting national legislation to the requirements of the European Green Deal.