Ukraine is trying to remove one of the most annoying brakes in the defense sector — taxes and customs rules that were written for peacetime, not for a country that needs thousands of drones, demining machines and electronic warfare tools every month. Two new draft laws, No. 14169 and No. 14170, registered in the Verkhovna Rada, are designed to fix exactly that.
At their core, these bills widen the list of operations and cases where defense manufacturers, R&D teams and integrators can bring in components, modernize equipment or even write off damaged parts without getting hit by VAT or customs obligations. That sounds technical, but for the sector it’s very practical: it means faster imports, cheaper upgrades and fewer situations where a plant has to “freeze” its working capital just because some part was written off during testing.
What the bills actually do
According to the explanatory logic around the drafts, they are meant to:
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Extend tax and customs benefits to more categories of defense goods — first of all:
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unmanned aerial vehicles (combat drones, reconnaissance platforms),
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mechanized demining machines,
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active countermeasures against technical intelligence (i.e. EW/anti-recon tools),
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other defense products on the government list.
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Exempt from VAT the import of combat simulators (training systems) that are needed for the security and defense sector.
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Apply benefits not only to production, but also to modernization/repair — because a lot of Ukrainian drones are constantly being upgraded, re-equipped or rebuilt from damaged units.
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Regulate what happens if the purpose of an imported good changes — for example, a component was brought in for one project but needs to be used in another.
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Protect enterprises from losses when parts or finished products:
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turn out to be defective,
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are written off during tests,
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are destroyed or lost due to accidents or force majeure (very real in wartime),
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or are declared unsuitable according to law.
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In other words, the bills are trying to close all those “holes” where, under current rules, the tax office could say: “you imported tax-free, but now the item is broken/written off/repurposed — pay VAT.” For defense manufacturers working on tight deadlines, this is toxic.
Why this matters right now
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Drones and demining are high-consumption segments. Components burn, boards fail, engines are replaced, new payloads are tried every week. If every such operation risks a tax claim, R&D slows down.
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Production cycles are short. Unlike classic defense contracts, Ukrainian private producers work almost in “garage-to-front” mode. They need predictable customs and tax treatment, not months of approvals.
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Working capital is crucial. Many private defense companies complain that money gets “frozen” precisely because of tax nuances on imported parts. The bills are directly aimed at preventing that.
What exactly will change for businesses if the Rada passes the bills
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Easier import of combat simulators. Training systems for the military and law enforcement will be able to enter Ukraine without extra tax cost — that makes training cheaper and faster.
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Cheaper modernization of drones, demining machines and EW tools. If you upgrade or reconfigure a system, you should still fall under the benefit — not lose it because the product is no longer in its “original” form.
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Clear rules for write-offs and losses. If a part was spoiled during testing, or destroyed in force majeure, or recognized as finally defective — and this is properly documented — the company won’t suddenly owe taxes on it.
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No “purpose trap.” If the purpose of the imported good changed, the law will describe how to tax it — instead of leaving the company in a gray zone.
What the state gets
This is not just “helping business.” For the state it means:
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faster deliveries to the defense and security sector;
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lower unit cost of domestically produced equipment;
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more stable operation of private defense factories that the government is now relying on;
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less bureaucracy around inevitable losses and write-offs in wartime production.
And, importantly, it syncs with the broader line of the government in 2025: open controlled exports, support local production, and not punish manufacturers for working fast.
Bottom line
These two bills are small in form but big in effect: they move Ukrainian tax/customs rules a bit closer to wartime reality — where the priority is to get the part, assemble the drone, train the unit and send it to the front, not to spend weeks proving to the tax service why a burnt board during tests should not be taxed.
