1. Legislative Status
-
Committee vote: Unanimous approval by the Verkhovna Rada Committee on Finance, Tax and Customs Policy
-
Next step: First-reading vote in Parliament
-
Champions: Committee Chair Vadym Hetmantsev + Ministry of Defence (MoD)
| Bill No. | Title | Scope |
|---|---|---|
| № 13420 | Amendments to the Tax Code & other laws | Fiscal incentives for defence-industrial enterprises |
| № 13421 | Amendments to Customs Code § XXI | Customs and export-control simplifications |
2. Core Concept — “Defence City”
“Effective defence capability is not only about the front line; it’s about empowering the companies that supply our army.” — Vadym Hetmantsev
Key Pillars
-
Resident Registry
-
MoD maintains a confidential List of Defence-Industrial Enterprises (Defence City Residents).
-
Enterprise data and reporting receive classified-information protection.
-
-
Tax Holidays (through 1 Jan 2036)
-
0 % corporate income tax on reinvested profits
-
0 % land tax
-
0 % real-estate tax
-
0 % environmental tax
-
Continuation of existing VAT exemptions, accelerated depreciation, and benefits for relocated plants and employees.
-
-
Customs & Currency Relief
-
Fast-track customs clearance for critical components
-
Simplified export-control regime for military technology
-
National Bank of Ukraine (NBU) empowered to issue flexible FX-control rules
-
Government-supported relocation assistance for facilities in high-risk zones
-
3. Strategic Impact
| Objective | Expected Benefit |
|---|---|
| Scale domestic production | Boost capacity from current ≈ US $9 bn to > US $30 bn potential, per MoD estimates |
| Crowd-in foreign partners | “Danish model” lets allies finance Ukrainian-made arms for the AFU and export |
| Protect sensitive data | Confidential registry shields supply chains from hostile intelligence |
| Long-term certainty | 11-year tax horizon aligns with multi-phase R&D and capital-investment cycles |
4. What Comes Next
-
Parliamentary first reading → amendments → second reading
-
MoD to draft inclusion criteria (defence-contract share, corruption screening, etc.) with industry feedback
-
Launch of digital Defence City portal for resident applications and compliance reporting
Bottom Line
If the draft laws pass, Ukraine’s defence-industrial base—from munitions makers to aerospace giants—will receive a powerful mix of tax holidays and regulatory fast lanes, positioning the sector as a cornerstone of wartime resilience and post-war economic growth.
