Global Daily Tax News, Ukraine To Waive Taxes On Arms Manufacturers, (Sep 2, 2025)

Ukraine's parliament has adopted draft legislation for the introduction of tax breaks for manufacturers of defence equipment.

The legislation provides, among other things, for an exemption from profit tax until 2036, and exemptions from land and property taxes and environmental tax, as well as simplified customs procedures, during martial law and for one year after it ends.

In addition, a simplified regime will be introduced for the international transfer of defence products.

The aim of the special regime is to increase the production of modern Ukrainian weapons and military equipment, develop cutting-edge technologies, attract investment to the sector, and enhance the capabilities of the Defence Forces, the Government said.

"Our primary goal is to fully equip the Defence Forces with everything they need, develop and improve our own weapons and equipment, and ensure the state's future security through a strong, capable army," said Minister of Defence, Denys Shmyhal.

The main requirement is that the majority of an enterprise's revenue – 75 percent of qualified income (50 percent for the aircraft manufacturing sector) – must come from the sale of defence products.