Briefly
On 21 August 2025, the Verkhovna Rada of Ukraine enacted two important items of laws — Legislation No. 13420 and Legislation No. 13421 — creating the authorized basis for the Defence Metropolis initiative. Legislation No. 13420 on Defence Metropolis framework and tax incentives obtained presidential assent on 3 September 2025.
The Defence Metropolis initiative establishes a definite authorized regime aimed toward fostering the development and modernization of Ukraine’s defence-industrial sector. It supplies numerous fiscal, regulatory and operational advantages to eligible enterprises.
Enterprises making use of for resident standing are required to reveal a strategic significance to nationwide defence. The Ministry of Defence of Ukraine will set up and keep a safe, confidential registry of accepted entities. All data pertaining to registered enterprises shall be safeguarded in accordance with nationwide safety protocols.
Please be aware:
- The Defence Metropolis regime is separate to, and might not be mixed with, different preferential tax regimes, similar to Diia Metropolis, simplified tax and different company revenue tax-exempt standing, together with charitable group advantages.
- Switch pricing guidelines are utilized to managed transactions below the overall phrases until companies/items will be provided by a so-called unique provider. Defence Metropolis residents are chargeable for proving {that a} provider holds “unique” standing.
- The worth-added tax exemption for defence companies and items provided to the Ukrainian military is utilized below common guidelines, with restricted changes.
- Defence Metropolis residency necessities prohibit the variety of enterprise entities concerned in defence applied sciences and merchandise which may be included.
- In contrast with the Diia Metropolis regime, the Defence Metropolis regime is much less beneficiant by way of the tax and authorized incentives supplied.
- A company revenue tax exemption supplied just for the reinvested income however not for the distributed income (within the type of dividends) could also be a discouraging issue for potential traders.
- Individually, the Defence Metropolis regime doesn’t provide analysis and growth credit, legal responsibility exemptions and governmental help, which could have made the regime extra enticing.
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Mariia Tashchi, Affiliate, has contributed to this authorized replace.
Briefly
On 21 August 2025, the Verkhovna Rada of Ukraine enacted two important items of laws — Legislation No. 13420 and Legislation No. 13421 — creating the authorized basis for the Defence Metropolis initiative. Legislation No. 13420 on Defence Metropolis framework and tax incentives obtained presidential assent on 3 September 2025.
The Defence Metropolis initiative establishes a definite authorized regime aimed toward fostering the development and modernization of Ukraine’s defence-industrial sector. It supplies numerous fiscal, regulatory and operational advantages to eligible enterprises.
Enterprises making use of for resident standing are required to reveal a strategic significance to nationwide defence. The Ministry of Defence of Ukraine will set up and keep a safe, confidential registry of accepted entities. All data pertaining to registered enterprises shall be safeguarded in accordance with nationwide safety protocols.
Please be aware:
- The Defence Metropolis regime is separate to, and might not be mixed with, different preferential tax regimes, similar to Diia Metropolis, simplified tax and different company revenue tax-exempt standing, together with charitable group advantages.
- Switch pricing guidelines are utilized to managed transactions below the overall phrases until companies/items will be provided by a so-called unique provider. Defence Metropolis residents are chargeable for proving {that a} provider holds “unique” standing.
- The worth-added tax exemption for defence companies and items provided to the Ukrainian military is utilized below common guidelines, with restricted changes.
- Defence Metropolis residency necessities prohibit the variety of enterprise entities concerned in defence applied sciences and merchandise which may be included.
- In contrast with the Diia Metropolis regime, the Defence Metropolis regime is much less beneficiant by way of the tax and authorized incentives supplied.
- A company revenue tax exemption supplied just for the reinvested income however not for the distributed income (within the type of dividends) could also be a discouraging issue for potential traders.
- Individually, the Defence Metropolis regime doesn’t provide analysis and growth credit, legal responsibility exemptions and governmental help, which could have made the regime extra enticing.
*****
Mariia Tashchi, Affiliate, has contributed to this authorized replace.
