Rada votes for new tax and customs benefits for Defence City residents

The Verkhovna Rada has voted in the first reading for two draft laws aimed at supporting defense industry enterprises within the framework of the Defence City project. About this reported chairman of the Tax Committee Danylo Hetmantsev.

The first draft law, No. 13420, provides for amendments to the Tax Code and other laws that will provide tax benefits for defense companies. The second, No. 13421, amends the Customs Code to simplify customs procedures for these companies.

In particular, the draft laws introduce an official list of defense industry companies that are residents of Defence City, which will be compiled and maintained by the Ministry of Defense. Access to information about these companies and their reporting will be protected and limited.

The companies on this list are entitled to tax benefits until January 1, 2036:

• income tax exemption subject to reinvestment;
• exemption from land tax;
• exemption from real estate tax;
• exemption from environmental tax.

In addition, the existing preferences, including VAT benefits, accelerated depreciation, and support for relocated businesses and employees, will remain in place.

The draft laws also simplify customs procedures and export control of military technologies, introduce the possibility for the NBU to establish specific currency supervision and currency transactions, and provide support in the relocation process.

The draft laws were prepared jointly with the Ministry of Defense and representatives of the defense industry.

Mr. Hetmantsev noted that discussions with business will continue during the preparation of the documents for the second reading.

• In June, the Verkhovna Rada introduced a package of bills which provides for the creation of a special tax regime for the defense industry.