Compliance
Tax Relief for War-Affected Businesses in Ukraine: What You Need to Know
How recent announcements from Ukraine’s State Tax Service are changing compliance for businesses damaged by war — from property tax exemptions to adjusted VAT audits.
By NomadicTax Research Team • 5-8 min read • September 15, 2026
## Overview
Ukraine has introduced several tax measures over the past few weeks aimed at helping businesses affected by Russian aggression. These policies focus on easing tax burdens for those who have suffered damage from attacks. Below are the key changes, practical examples, and actionable advice for affected taxpayers.
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## Key Tax Measures Announced
1. **Property Tax Exemption for Damage** ([tax.gov.ua](https://tax.gov.ua/en/new-about-taxes--news-/print-1046758.html?utm_source=openai))
- Tax on real estate (excluding land plots) **will not be accrued or paid** for residential and non-residential properties that require major repairs, reconstruction or restoration if damaged by hostilities. Valid from the first day of the month in which damage is recorded in the **State Register of Property Damaged by War**. Reinstatement happens when property is repaired and declared serviceable. ([tax.gov.ua](https://tax.gov.ua/en/new-about-taxes--news-/print-1046758.html?utm_source=openai))
2. **Writing Off Destroyed Assets** ([tax.gov.ua](https://tax.gov.ua/nove-pro-podatki--novini-/1040563.html?utm_source=openai))
- **Destroyed goods/inventories** may be deducted as expenses according to accounting rules, reducing profit tax base.
- **Destroyed fixed assets** (equipment, buildings, transport): If annual income ≤ UAH 40 million, full cost can be written off; for income above that, only the residual value under tax-accounting rules applies. Proper documentation required. ([tax.gov.ua](https://tax.gov.ua/nove-pro-podatki--novini-/1040563.html?utm_source=openai))
3. **Tax Administration and Risk Controls Improvement** ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/print-1046390.html?utm_source=openai))
- Businesses identified as affected will be clearly flagged in tax authorities’ systems.
- Audits and tax risk assessments will **take into account war-related damage**, reducing automatic flags for irregularity when damage is documented.
- Less bureaucracy: use of electronic records to avoid repeating info already in government registers. Additional tax consultant support for severely affected companies. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/print-1046390.html?utm_source=openai))
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## Practical Examples
- **Example 1:** A shop damaged in shelling declared by the State Emergency Service on 10 August 2026, property listed in the War Damaged Register on 15 August. Property needs major repair. From **1 August**, no real estate tax accrues for that building until repair is complete and certified. Restoration happens; tax resumes from month after certification.
- **Example 2:** Company with annual revenue of **UAH 30 million** whose warehouse was completely destroyed. All stock is destroyed. They can write off the full per-accounting cost of stock; fixed assets (if applicable) can also be written off, since income threshold is below UAH 40 million. Must have proper damage certificate (DSNS-act, court or expert-chamber report, etc.).
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## What You Should Do Now (Actionable Advice)
| Step | What to Do | Key Notes |
|------|------------|-----------|
| 1 | Check if your property or assets are listed in the State Register of Damaged Property | Without that registration you can’t claim exemptions or deferrals. ([tax.gov.ua](https://tax.gov.ua/en/new-about-taxes--news-/print-1046758.html?utm_source=openai)) |
| 2 | Gather documentation: damage reports, police/DSNS reports, expert assessments or court decisions | Needed for deductions and registration. |
| 3 | Update your accounting to reflect unrecoverable stock and property loss | Include in cost of goods sold or expenses under profit tax. |
| 4 | Submit any notifications or applications early if overdue reporting or tax payments caused by war | The SFS is offering grace in many cases but formal notification may be required. |
| 5 | Seek support from tax consultancy offices where damage is serious | They can help navigate administrative procedures and avoid unnecessary audits. |
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## Compliance Risks & Pitfalls to Avoid
- Claiming exemptions without registering damage in the official Register will lead to denial.
- Using minor damage thresholds incorrectly: only severe damage (Category II or III) automatically qualifies for full exemption.
- Missing deadlines for submitting declarations or notifying tax authorities could nullify benefits.
- Insufficient documentation will prevent deduction for destroyed stock or fixed assets.
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## Why These Matters Are Changing Tax Outcomes
These policies are part of Ukraine’s broader tax administration transformation to **reduce formal burdens on wartime-affected businesses**, align with international norms, and protect both taxpayers and state revenue. They offer a **risk-based approach** rather than blanket penalties when business performance drops due to force majeure. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/print-1045996.html?utm_source=openai))
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## Summary
Affected businesses in Ukraine now have: exemptions from real estate tax for damaged property (excluding land), ability to write off destroyed stock and assets, more favorable risk assessment in audits, and simpler interactions with the tax authority. To make use of these, ensure your damage is properly registered, keep good documentation, and engage proactively with the tax service. These changes blend **tax relief, compliance flexibility, and administrative support** during Ukraine’s ongoing war challenges.