Ukraine’s Parliament Approves New Tax Exemptions for Defense Goods

Ukraine’s Verkhovna Rada has approved legislation expanding tax exemptions for goods intended for the country’s security and defense forces, including certain vehicles and components used in defense production.

What the law changes

Law No. 15463-1 amends the Tax Code to exempt certain defense-related imports and supplies from value-added tax (VAT) and excise duties.

The approved legislation covers the import of quad bikes and motor all-terrain vehicles intended for the security and defense forces. It also provides a VAT exemption for imported components used in the Ukrainian production of weapons, military unmanned systems, electronic warfare and reconnaissance equipment, and optoelectronic systems and devices.

For domestically produced defense equipment, the tax exemption is linked to its intended final recipients, including the Ministry of Defense, the Armed Forces of Ukraine, law-enforcement agencies and other military formations.

Exemptions to apply regardless of funding source

The legislation also establishes a unified approach to tax benefits regardless of how a defense purchase is financed. This addresses situations in which defense goods are purchased using international military assistance, technical assistance or partner programs rather than directly from the state budget.

Separate legislation, No. 15464-1, approved alongside the tax bill, extends corresponding exemptions from import duties for qualifying defense-related goods and components.

Parliament’s vote

The bill was registered on August 6, 2026, as an alternative version of earlier legislation on tax benefits for defense-purpose imports. The Verkhovna Rada’s official records show that it was approved in the first reading with 272 votes and passed as a whole with 271 votes on September 3.

The legislation is currently marked by Parliament as adopted and awaiting signature.