How are the VAT operations for supply of defense goods taxed during the martial law?

Information and Reference Department, published 06 April 2022 at 15:26 Chapter: News

Law of Ukraine as of 15.03.2022 № 2120-IX “On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding validity of norms during the martial law” amended the Tax Code of Ukraine as of 02.12.2010 № 2755-VI with changes and amendments (hereinafter - TCU).

Taking into account changes made to Paragraph 32 Sub-section 2 Section XX "Transitional Provisions" of the TCU, temporarily, for a period, in particular, an imposition of the martial law according to the law, there is an exemption from the VAT on import to the customs territory of Ukraine and supply in the customs territory of Ukraine of:

- special personal protective equipment (helmets, manufactured in accordance with military standards or technical conditions or their equivalents and specially designed components (ie helmets, shock absorbers), classified in subcategory 6506 10 80 00 according to Ukrainian classification of the FEA products, bulletproof vests classified in subcategory 6211 43 90 00 according to Ukrainian classification of the FEA products), made in accordance with military standards or military conditions for needs of law the enforcement agencies, the Armed Forces of Ukraine and other military formations, voluntary formations of territorial communities formed in accordance with the laws of Ukraine, other entities involved in a fight against terrorism in accordance with the law and / or involved in the implementation of measures to ensure national security and defense, repel and deter armed aggression by the Russian Federation; threads and fabrics (materials) classified in product subcategories 3920 10 89 90, 3920 61 00 00, 3921 90 60 00, 5402 11 00 00, 5407 10 00 00, 5603 14 10 00 and 6914 90 00 00 according to Ukrainian classification of the FEA products, for production of body armor and helmets;

medicines and medical devices in accordance with Sub-paragraph “c” Paragraph 193.1 Article 193 of the TCU, intended for use by health care institutions, participants in the anti-terrorist operation, persons involved in the implementation of measures to ensure national security and defense, repel and deter armed aggression of the Russian Federation, to provide medical assistance to individuals who during the anti-terrorist operation and / or measures to ensure national security and defense, repulse and deterrence of armed aggression of the Russian Federation and / or imposition of the martial law in accordance with the law suffered injuries, contusions or other damage to health, according to the list established by the Cabinet of Ministers of Ukraine;

medicines and medical devices without state the registration and permits on the possibility of importation to the customs territory of Ukraine, intended for use by health care institutions, participants in the anti-terrorist operation, persons involved in national security and defense measures, repulse and deter the armed aggression of the Russian Federation, to provide medical assistance to individuals who during the anti-terrorist operation and / or measures to ensure national security and defense, repulse and deterrence of armed aggression of the Russian Federation and / or imposition of the martial law in accordance with the law suffered injuries, contusions or other damage to health, according to the list and to extent established by the Cabinet of Ministers of Ukraine;

defense goods, defined as such in accordance with Paragraph 29 of Part 1 Article 1 of the Law of Ukraine "On Defense Procurement", which are classified by the following groups, product items and subcategories of Ukrainian classification of the FEA products:

3601 00 00 00, 3602 00 00 00; 3603 00 (only for percussion capsules, detonators used for defense purposes), 3604 90 00 00 (only for flares used for defense purposes);         

8525 60 00 00, 8529 90 20 00 (only for equipment for transmitting and receiving voice, images and other information, including equipment for wired or wireless communication, directional listening equipment, ultra-shortwave and shortwave radios for military use, reconnaissance and signaling equipment, their parts and accessories, if the supply (purchase) of such goods is carried out for state customers on defense orders);

8702 - 8705 (only for passenger and lorries of normal type used for defense purposes and having light armor or equipped with removable armor);

8710 00 00 00;

8802, 8803 (only for unmanned aerial vehicles with or without weapons used for defense purposes, parts thereof);

8804 00 00 00 (only for parachutes and other devices intended for landing of military personnel and / or military equipment);

Group 90 (only for binoculars, night vision devices, thermal imagers, goggles and similar optical products, telescopic sights and other optical devices for military weapons, unless supplied with the military weapons for which they are intended, other optical, navigational and topographical devices and tools used for defense purposes);

Group 93 other than those of heading 9303 and subcategory 9304 00 00 00 and 9305 (only for products of headings 9303 to 9304), 9306 90 90 00 as well as 9307 00 00 00.

More information is in the “Knowledge Base” of public information and reference resource