Exemption from customs payments on goods for the restoration of energy infrastructure and demining

On July 27, 2024, amendments to the Tax and Customs Codes of Ukraine (Laws No. 3853-IX and No. 3854-IX of 16.07.2024, hereinafter - "Laws", respectively) came into force, which aim to stimulate the restoration of Ukraine's energy infrastructure, as well as to facilitate demining activities, by exempting from VAT and import duty import of relevant goods.

Below we comment on the main provisions envisaged by the Laws. We will be glad to discuss the relevant changes more extensively in the context of your business.

Temporarily, for the period of martial law, but no later than January 1, 2026, the import of specific goods is exempt from VAT and import duty if:

• such goods are intended for the restoration of energy infrastructure; or

• such import is carried out under the agreements financed by the Secretariat of the Energy Community.

Also, for the period of martial law, the Laws provide for the possibility of applying exemption from VAT and import duty to operations on import of tactical headphones of special military purpose (code 8518 30 00 90 according to the UCC FEA) and radio-electronic means of detection and counteraction to unmanned aerial vehicles (code 8543 according to the UCC FEA), including anti-drone rifles (previously this provision applied only to anti-drone rifles). 

Another important step for strengthening the defense capability of Ukraine is the introduction of preferential import of certain active means of counteracting technical intelligence, machines of mechanized demining and expanding the list of components (materials, units, assemblies, equipment and component products) of unmanned systems for use in their own production activities for production and/or repair.

The Laws also establish additional conditions for the above-mentioned exemptions from taxation. In particular, these exemptions do not apply to goods that have origin from a country recognized as a state-occupier (aggressor) / are imported from the territory of such a country and/or from the temporarily occupied territory of Ukraine.