Ukraine’s Rada Passes Key Bills to Launch Defence City Initiative
On August 21, Ukraine’s Verkhovna Rada passed two key bills in their second reading, setting the stage for the Defence City initiative, aimed at strengthening the country’s defense-industrial complex. The announcement came from Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy.
«This is the foundation for the development of the Ukrainian defense-industrial complex, which will not only bolster the state’s defense capability but also open up new opportunities for investment, technology, and jobs,» Hetmantsev said.
- Draft Law #13420 on Amendments to the Tax Code of Ukraine and Other Laws Supporting Defense-Industrial Complex Enterprises
- Draft Law #13421 on Amendments to Section XXI «Final and Transitional Provisions» of the Customs Code of Ukraine regarding Support for Defense-Industrial Complex Enterprises.
Hetmantsev noted that both draft laws were significantly refined in consultation with the Ministry of Defense and Ukrainian businesses ahead of the second reading.
Key Provisions
- The legal regime for Defence City will be in place until January 1, 2036.
- A Defence City Register will replace the List of Defense-Industrial Complex Enterprises, managed by the Ministry of Defense.
- Clear rules for residents: status, conditions for qualification, and oversight will be governed by the Law «On National Security of Ukraine.»
- Qualified income for residents will start at 75%, with aircraft manufacturing income beginning at 50%.
The bills also introduce a range of tools to support Defence City residents:
- Tax incentives, including exemptions from income tax on reinvestment, land, real estate, and eco-tax.
- Simplified customs procedures.
- Streamlined export control for military goods.
- The possibility for the National Bank of Ukraine (NBU) to establish specific currency supervision measures.
- Support for relocation and enhanced security for production facilities.
In May, Hetmantsev outlined regulatory and legal acts better to regulate the export regime for Ukraine’s defense industry. He estimated that, with partner support, Ukraine could produce €25–30 billion worth of weapons annually.
In June, Hetmantsev and lawmaker Davyd Arakhamia submitted a package of four draft laws on Defence City to establish a legal framework for state support of defense-industrial enterprises. Two of those laws have now been officially adopted.
Ukraine’s Rada Passes Key Bills to Launch Defence City Initiative
On August 21, Ukraine’s Verkhovna Rada passed two key bills in their second reading, setting the stage for the Defence City initiative, aimed at strengthening the country’s defense-industrial complex. The announcement came from Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy.
«This is the foundation for the development of the Ukrainian defense-industrial complex, which will not only bolster the state’s defense capability but also open up new opportunities for investment, technology, and jobs,» Hetmantsev said.
- Draft Law #13420 on Amendments to the Tax Code of Ukraine and Other Laws Supporting Defense-Industrial Complex Enterprises
- Draft Law #13421 on Amendments to Section XXI «Final and Transitional Provisions» of the Customs Code of Ukraine regarding Support for Defense-Industrial Complex Enterprises.
Hetmantsev noted that both draft laws were significantly refined in consultation with the Ministry of Defense and Ukrainian businesses ahead of the second reading.
Key Provisions
- The legal regime for Defence City will be in place until January 1, 2036.
- A Defence City Register will replace the List of Defense-Industrial Complex Enterprises, managed by the Ministry of Defense.
- Clear rules for residents: status, conditions for qualification, and oversight will be governed by the Law «On National Security of Ukraine.»
- Qualified income for residents will start at 75%, with aircraft manufacturing income beginning at 50%.
The bills also introduce a range of tools to support Defence City residents:
- Tax incentives, including exemptions from income tax on reinvestment, land, real estate, and eco-tax.
- Simplified customs procedures.
- Streamlined export control for military goods.
- The possibility for the National Bank of Ukraine (NBU) to establish specific currency supervision measures.
- Support for relocation and enhanced security for production facilities.
In May, Hetmantsev outlined regulatory and legal acts better to regulate the export regime for Ukraine’s defense industry. He estimated that, with partner support, Ukraine could produce €25–30 billion worth of weapons annually.
In June, Hetmantsev and lawmaker Davyd Arakhamia submitted a package of four draft laws on Defence City to establish a legal framework for state support of defense-industrial enterprises. Two of those laws have now been officially adopted.
