Restoration of the Statute of Limitations and a Number of Changes in the Taxation Sphere

We inform you about key changes in the legislation of Ukraine, provided by:

• Law No. 4434-IX "On Amendments to Section 'Final and Transitional Provisions' of the Civil Code of Ukraine Regarding the Restoration of the Statute of Limitations," adopted on May 14, 2025 and entered into force on September 4, 2025 (further - Law No. 4434);

• Law No. 4536-IX "On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine in Connection with the Adoption of the Law of Ukraine 'On Integrated Prevention and Control of Industrial Pollution' and for the Purpose of Improving Certain Provisions of Tax Legislation," adopted on July 16, 2025 and entering into force on October 1, 2025 (some provisions will take effect from January 1, 2026) (further - Law No. 4536).

The relevant amendments restore the statute of limitations in civil (non-tax) legislation, extend certain tax benefits, and clarify licensing requirements for businesses.

Main Provisions of Law No. 4434:

• Restoration of the statute of limitations, which was suspended during martial law, by removing the provision that suspended the limitation period during martial law in Ukraine (paragraph 19 of Section "Final and Transitional Provisions" of the Civil Code of Ukraine).

Thus, from the day following the entry into force of Law No. 4434 (i.e., from September 5, 2025), a person must either:

• resume the calculation of the limitation period that had not expired as of April 2, 2020;

• or start the calculation in the case of a limitation period that arose in the period from April 2, 2020, to September 4, 2025 (inclusive).

Main Provisions of Law No. 4536:

1. Value Added Tax (“VAT”):

• Temporarily (until Ukraine attains full membership in the EU), the free transfer of engineering infrastructure objects of reclamation systems to water users' organizations is exempted from VAT.

• The possibility to use the cash method for supply, distribution of electricity, water supply and sewage is extended until January 1, 2028 (currently until January 1, 2026);

2. Tax Benefits and Administration:

• Tax obligations, fines, and penalties for local taxes can be adjusted or cancelled if local government authorities reduced rates during martial law (since 2022). Paid amounts will be utilized against the future tax liabilities.

• Private entrepreneurs will submit tax calculations for personal income tax (PIT), military tax, and unified social contribution (USC) on quarterly basis (from January 1, 2026).

• Private entrepreneurs and persons conducting independent professional activities are exemp from USC payment for themselves, provided that the minimum insurance contribution has been paid for them by any employer (currently, this benefit applies only to those employed at their primary place of work).

• Simplified tax reporting for the incomes of war prisoners will be introduced (only general amounts, without personal data). The tax agents (camps, pre-trial detention centres, etc.) will be responsible for submitting such returns.

• Special taxation rules for patronage dividends for agricultural cooperatives are introduced.

3. Customs Payments:

• An export duty of 10% of the customs value is introduced on soybeans and rapeseed/canola seeds;

• Agricultural producers who export soybeans and rapeseed/canola seeds grown by themselves, as well as agricultural cooperatives exporting such products grown by cooperative members, are exempt from paying this export duty.

4. Licensing:

• The list of licenses that a business entity must obtain when conducting certain foreign economic operations is clarified;

• Free distribution of tobacco raw materials is prohibited;

• Minimum requirements for the average salary of employees of a legal entity or the income of a private entrepreneur are established to maintain licenses for retail trade in alcohol, tobacco, liquids for electronic cigarettes, and fuel; failure to comply may result in license cancellation (not less than 2 minimum wages set by law as of January 1 of the reporting (tax) year or not less than 1.5 minimum wage if all retail outlets are outside the regional centre)

• Cases when the import into Ukraine of unmarked alcohol and tobacco products is possible are clarified.