Temporary exemption from tax obligations for business from the frontline territories: who is eligible and how to obtain it

Taxpayers from the frontline territories affected by hostilities may receive temporary exemption from tax obligations.

This right is determined by Order of the Ministry of Finance of Ukraine № 225 as of 029.07.2022. It provides for the postponement of deadlines for submitting reports and paying taxes for such business to the date after end of the martial law or renewal of the payer’s ability to fulfill obligations.

Who can benefit:

Exemption right is granted to legal entities and individuals who have suffered from russian aggression and cannot fulfill their tax obligations due to its consequences, in particular:

- destruction of production facilities in whole or in part;

- destruction of computer and other equipment;

- presence in the hostilities area;

- occupation of territory where enterprise or its taxation objects are located;

- loss of access to production or administrative premises;

- loss of other production or non-current assets.

Temporary exemption provides for:

postponement of deadlines:

- submission of reporting on certain taxes, levies and obligatory payments;

- payment of certain taxes, levies and obligatory payments;

exemption from financial sanctions for:

- untimely registration of tax or excise invoices;

- violation of the RRO/PRRO usage procedure.

What needs to be done:

The taxpayer must submit a free-form application with supporting documents to the regulatory authority.

These may include:

- acts of recording fires, destructions, compiled by authorized employees of the State Emergency Service;

- data from the State register of property rights to real estate, on the property ownership right;

- certificates from the Unified register of pre-trial investigations on the registration of criminal offenses;

- bank statements on the absence of funds as other sources of income of the enterprise;

- other documents confirming obstacles or impossibility.

It is possible to submit them at the tax registration place or to any State Tax Service’s service center in person, by mail (with delivery notification), or through the Electronic cabinet.

Document review:

The regulatory authority reviews application and documents within 20 calendar days.

If there are not enough documents, the payer receives decision with a suggestion to provide additional materials for confirmation within 10 calendar days. After receiving such additional documents, the regulatory authority considers them within 20 calendar days.

Decision on the possibility or impossibility of fulfilling tax obligations by the payer is made taking into account individual characteristics of the business and circumstances of each payer, the cause-and-effect relationship, and all documents.

In the case of positive decision, the payer receives right to fulfill tax obligations within six months after the end of martial law or after renewal of the possibility of fulfilling them.