Verkhovna Rada supports tax benefits for Defence City in first reading

The Verkhovna Rada adopted in the first reading a package of draft laws that provides for the introduction of a special tax regime for residents of the Defence City project, a cluster of Ukrainian defence enterprises. The initiative to decriminalise the disruption of government orders, which caused criticism from the expert community, was excluded from the final version.

These are draft laws No. 13420, No. 13421 and No. 13422-1. The previously proposed amendments to the Criminal Code, which exempted weapons manufacturers from liability in the event of non-fulfilment of contracts in the absence of harm to defence capability, life or the environment, were removed from them.

The package of legislative changes provides for the creation of a special list of Defence City residents, which will be maintained by the Ministry of Defence, as well as tax benefits until 1 January 2036. Among them are exemption from income tax on reinvestment, land tax, real estate tax, and environmental tax.

The dialogue with manufacturers will continue as part of the preparation of draft laws for the second reading.

It is also worth noting that the “Rada zbroyariv” previously expressed its views on the advantages and need for further development of the Defence City draft laws.