From 01 January 2026, updated rules for value added tax on certain transactions in the fields of transport, defence technologies and energy infrastructure restoration will come into force in Ukraine, according to the State Tax Service of Ukraine.
The updates provide for a review of tax incentives and clarification of the VAT regime applicable to certain categories of goods and transactions, considering current economic and security considerations.
Key VAT changes include:
- the import and supply of electric vehicles in the customs territory of Ukraine are subject to VAT in accordance with the general procedure;
- the general VAT regime also applies to new vehicles powered by compressed or liquefied natural gas (methane) or biogas;
- transactions involving the import and supply of combat simulation equipment intended for training purposes are exempt from VAT;
- VAT exemption for imports of energy recovery equipment has been extended until 01 January 2029.
In addition, no compensatory VAT liabilities are accrued on the sale of VAT-exempt military goods, regardless of the type of contract.
We will continue to closely monitor further developments in this area and report on them in the future Legal News.
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