March news digest 2025

Corporate Law Practice

Cabinet of Ministers abolishes outdated regulations on licenses for property investments abroad

On March 28, 2025, the Cabinet of Ministers of Ukraine made a decision to abolish outdated regulatory acts that governed the issuance of licenses for property investments by Ukrainian residents abroad. The government canceled three resolutions and five specific provisions in regulatory acts related to this process.

As Deputy Minister of Economy Taras Kachka stated, the cancellation of these regulations is part of the deregulation reform aimed at clearing the legal field of outdated acts. Previously, a decree requiring licenses for property investments was abolished, but some of its provisions remained in force.

The issuance of such licenses was provided by a Presidential decree from 1995, which required Ukrainian companies making property investments abroad to obtain licenses. Over the entire period of the decree’s operation, approximately 170 applications for such licenses were submitted.

It should be noted that deregulation reform continues in Ukraine with the goal of simplifying business conditions. In January 2023, the government established an Interdepartmental Working Group on Deregulation, which has already reviewed 1,323 regulatory acts. Of these, 456 were recommended for abolition, and 584 for simplification. As of today, 138 regulatory instruments have been abolished.

Verkhovna Rada approves changes to simplify land allocation for digital infrastructure

On March 25, 2025, the Verkhovna Rada of Ukraine adopted Bill No. 9549, which simplifies the procedure for allocating land for the development of digital infrastructure.

In particular, the law shortens the time required to secure land use rights for the placement of electronic communications infrastructure, which will improve mobile network quality in rural areas. It also introduces a mechanism for the forced expropriation of land in Transcarpathia for strategic enterprises during martial law.

The changes also regulate the registration of land plots in conflict zones and temporarily occupied territories without conducting land surveying works, and extend the deadline for changing land use purposes from 2025 to 2028.

Verkhovna Rada Committee recommends approval of bill to improve legal regulation of single-member companies

On March 5, 2025, the Verkhovna Rada’s Legal Policy Committee reviewed Bill No. 12337 “On Amendments to the Civil Code of Ukraine Regarding the Improvement of Legal Regulation of Single-Member Companies,” proposed by MP I. Kalaur.

The bill proposes several amendments to the Civil Code, including:

• recognizing the right of a company to have a single participant when founded or when shares are transferred to one person;
• allowing the creation of the company based on its own or a model statute;
• enabling decisions to be made in writing by the participant;
• introducing restrictions on creating a company with a single participant who is already a participant in another company.
  The approval of this bill will help harmonize the Civil Code with EU directives and support European integration processes in Ukraine. The Legal Policy Committee recommended that the Verkhovna Rada approve the bill in its first reading.

Ministry of Economy launches chatbot for industrial park search

The Ministry of Economy of Ukraine has launched a new chatbot that helps entrepreneurs quickly find a suitable industrial park for setting up production. The chatbot also provides step-by-step instructions for creating industrial parks and offers helpful tips for manufacturers.

The chatbot includes several useful features:

• up-to-date information on industrial parks;
• selection of parks from the Register based on specified criteria;
• contact information for managing companies;
• consultations on legislation and the park creation process;
• contact details for responsible specialists at the Ministry of Economy.
  To launch the bot, users can follow the link, save the number +380688026440 and send a message, or scan the QR code.

According to the Ministry of Economy, 31 new industrial parks were registered in 2024 — nearly three times more than in previous years. Currently, there are 98 parks in the register. In 2025, the state budget allocates 500 million UAH to stimulate the creation of industrial parks, with the possibility of additional funding after the first half of the year.

Tax Law Practice | Tax Alert

Increase in excise tax rates on tobacco products: the law came into force

On March 25, 2025, the Law of Ukraine No. 4115-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Revision of Excise Tax Rates on Tobacco Products” came into force (except for some of its provisions that will be put into effect later).

The Law, in particular, until January 1, 2028, introduces a gradual increase of:

• excise tax rates on tobacco products, tobacco and industrial tobacco substitutes, as well as other products containing tobacco, tobacco substitutes, other than liquids used in electronic cigarettes, nicotine-containing products, their substitutes for smoking, sniffing, sucking, chewing or inhalation without combustion by heating;
• minimum excise tax liability for the payment of excise tax on tobacco products.
  Such excise tax rates and minimum excise tax liability are set in EUR.

The law on tax measures to combat bribery of foreign officials in international business transactions came into force

On March 25, 2025, the Law of Ukraine No. 4112-IX “On Amendments to the Tax Code of Ukraine Regarding the Implementation of the Recommendations of the Organization for Economic Co-operation and Development on Tax Measures to Further Combat Bribery of Foreign Officials in International Business Transactions” came into force.

It is worth noting that the Law, inter alia:

• prohibits the reduction of the object of taxation (income (profit), part of it) by the amount of expenses in transactions related to the provision of an improper advantage to officials, including officials of a foreign state;
• envisages the right of taxpayers to self-adjust their tax obligations if there were facts of providing an improper advantage, as well as determines the amount of the fine in case of submission of clarifying tax calculations in such cases;
• supplements the functions of the tax authority with the notification of the National Anti-Corruption Bureau of Ukraine of, inter alia, circumstances (facts) that may indicate the performance of transactions for the purpose of providing an improper advantage to a foreign official, revealed during documentary audits of taxpayers, and cases of receipt of information from the competent authorities of a foreign state indicating the performance of such transactions;
• stipulates the conduction of a documentary unscheduled audit (without observance of the statute of limitations) of a taxpayer against whom or any other persons acting in the interests of this taxpayer, a court verdict of guilty for committing criminal offenses of providing an improper advantage (articles 369, 369-2 of the Criminal Code of Ukraine) has entered into force, and such actions could result in a reduction of the taxable object and/or understatement of the tax liability. In addition, the accrual of a monetary liability to such a taxpayer is possible without observing the statute of limitations;
• establishes that the use of income (profits) of a non-profit organization included in the Register of Non-Profit Institutions and Organizations for the purpose of providing an improper advantage (regardless of the amount) during the commission of a relevant criminal offense for providing an improper advantage is grounds for excluding such an organization from the Register and charging with a CIT liability, fines and penalties;
• updates the penalties for certain violations in the field of transfer pricing (more details on this we covered here).

The draft law on changing the deadlines for reporting on the amount of income accrued (paid) in favor of individuals is registered

On March 17, 2025, the Verkhovna Rada of Ukraine registered draft law No. 13108 “On Amendments to the Tax Code of Ukraine regarding the Deadlines for Reporting on Amounts of Income Accrued (Paid) in Favor of Individuals”.

The draft law, in particular, suggests the following:

• instead of monthly reporting, to submit to the tax authorities a tax calculation of the amounts of income accrued (paid) in favor of individual taxpayers and the amounts of tax withheld from them, as well as the amounts of the accrued single social contribution, on a quarterly basis with a breakdown by months of the reporting quarter;
• to submit to the tax authorities information regarding the hiring or dismissal of employees within 40 calendar days after the end of the reporting (tax) quarter, instead of 20 calendar days after the end of the reporting (tax) month;
• instead of monthly submission, notaries on a quarterly basis will be obliged to submit to the tax authorities information on sale and purchase (barter) agreements of real and personal property between individuals, information on the issuance of inheritance certificates, and information on the certification of gift agreements.

Alternatives to the draft laws on zero customs clearance of vehicles for specific categories of persons are suggested

On March 17, 2025, the Verkhovna Rada of Ukraine registered draft laws:

• No. 13058-1 “On Amendments to the Customs Code of Ukraine on Zero Customs Clearance of Vehicles for Combatants”;
• No. 13059-1 “On Amendments to the Tax Code of Ukraine on Zero Customs Clearance of Vehicles for Combatants”.
  These draft laws are alternatives to draft laws No. 13058 and No. 13059, a general overview of which we provided here.
  It should be noted that, contrary to the main draft laws, their alternatives suggest that for the period of martial law in Ukraine and until December 31 of the year following the year in which it is terminated, the exemption from VAT, excise tax and import duty on import of specific types of vehicles will only be applicable to operations carried out by the combatants or by their officially authorized persons.
• Meanwhile, the main draft laws suggest applying this exemption to individuals:
• who have the status of a person with a disability as a result of war; are combatants who were injured (or officially authorized representatives of such persons);
• who have officially transferred their own vehicle to a military unit participating in measures to repel and deter military aggression against Ukraine.

The schedule of tax audits for 2025 is updated

On March 28, 2025, the State Tax Service of Ukraine published an updated schedule of planned documentary audits for taxpayers for 2025.

According to the current version, sections I–IV of the schedule have been amended.
It is worth noting that starting from January 1, 2025, amendments to the schedule of planned documentary tax audits shall be made in accordance with the general requirements of the Tax Code of Ukraine, namely no more than once in the first and once in the second quarter of the year, unless the changes are related to changes in the name of the taxpayer already included in the schedule and/or correction of technical errors (instead of monthly amendments to the schedule, which were possible from August 1, 2023, to December 31, 2024).

The updated schedule shall be published on the official website of the State Tax Service by the 30th day of the last month of the quarter (in case of changes in the name of the taxpayer already included in the schedule and/or correction of technical errors – by the 30th day of the month preceding the month in which such documentary scheduled audits will be conducted).

A review of Supreme Court practice in administrative cases for February 2025 is published

On March 26, 2025, the Cassation Administrative Court within the Supreme Court published a review of current judicial practice for February 2025.

In this review, the Supreme Court highlighted the positions, in particular, regarding:

• moratorium on fines for tax offenses during martial law;
• the impact of force majeure on the accrual of penalties for violation of the deadlines for payments on foreign exchange operations during martial law (more about this position we covered here);
• conducting an actual tax audit and imposing penalties for violation of requirements for fiscal receipts;
• liability of the taxpayer for violation of the terms of registration of tax invoices during martial law;
• renewal of VAT payer registration after cancellation of the annulment;
• proper justification of the tax authorities’ decisions on tax debt collection.

Litigation Practice

Critical importance status of a company: key aspects

A company can obtain or confirm its status as a critically important enterprise if it meets the criteria defined by the Cabinet of Ministers of Ukraine Resolution № 76.

The government has defined eight criteria, and to obtain/confirm the status of a critically important enterprise, a company must meet at least three of these criteria, with two being mandatory.

The next step in this process is to submit an application to the relevant authority or state administration (military administration) along with a justification and a set of documents to confirm that the company meets at least three criteria.

After receiving the application, the authorized body verifies the documents and assesses whether the company meets the established criteria. The formal review period is up to 10 business days from the date of submission.

If the decision is positive, the company is included in the Unified List of government bodies, enterprises, and organizations authorized to reserve military personnel. From this point, the company has the ability to reserve employees through the “Diia” portal.

It is important to note that a company with critical importance status must confirm this status at least once a year. To confirm, the company submits an application with the required documents to the authority that granted the company the status of a critically important enterprise, as listed above.
Furthermore, the authority that granted the critical importance status periodically monitors the activities of such enterprises and may conduct a check to ensure compliance with the criteria.

If non-compliance with the criteria is discovered, the authority will revoke the previously granted critical importance status. Please note that the company may only reapply for this status no earlier than six months after the revocation.

The truth about courts: debunking popular myths

GOLAW’s litigation partners, Kateryna Manoylenko and Kateryna Tsvetkova, debunked myths about the judiciary in Ukraine that are often prevalent among citizens and businesses. In the video, the partners shared their experience and explained how judicial processes work in practice.

The Supreme Court recognized the acceptability of indicating only the total cost of work performed by the lawyer without detailed breakdown into hourly or fixed rates – Administrative Cassation Court

The Administrative Court granted the claim of the enterprise against the State Labor Service regarding the cancellation of a fine but rejected the claim for reimbursement of legal expenses. The submitted documents did not specify the cost of one hour of the lawyer’s work or the cost of specific types of work. The court noted that this made it impossible to determine the mechanism for calculating the lawyer’s fee.

The appellate court overturned this decision and ruled to recover legal costs in favor of the enterprise, recognizing the declared amount of expenses as documented and commensurate with the complexity of the case, the scope of services provided, and the work performed.

The state authority filed a cassation appeal to the Supreme Court, insisting on the need to determine the amount of compensation based on the criteria of the actual existence of legal costs (their validity and necessity), as well as the reasonableness of their amount, considering the circumstances of the case and the financial status of the parties. Meanwhile, the documents provided by the enterprise did not contain a calculation method for legal costs, the amount, and the way the lawyer’s fee was determined, which prevented the court and the other party from verifying the actual agreement regarding the fee.
The panel of judges noted that the Supreme Court has established consistent practice regarding the reimbursement of legal costs. When determining the compensation for expenses incurred for professional legal assistance, the court must be guided by the criteria of the reality of the lawyer’s expenses (confirming their validity and necessity), as well as the reasonableness of their amount, based on the specific circumstances of the case and the nature of the services provided.

At the same time, the panel disagreed with the defendant’s argument about the mandatory indication in the lawyer’s report of the cost calculation for such work in an hourly breakdown or as a fixed amount. It is sufficient to confirm only the amount of time spent, without justifying the exact time spent on specific actions.

The procedure for conscripting military personnel for military service during mobilization is irreversible, even when the conscription procedure is recognized as unlawful – Administrative Cassation Court of the Supreme Court

The claimant turned to the first-instance court, linking the violation of his rights to the failure to follow the proper procedure for conscription, specifically his failure to undergo a medical examination during conscription.

The first-instance and appellate courts found the actions of the district territorial recruitment center unlawful and ordered the military unit to discharge the claimant from military service, considering it an appropriate remedy for restoring his rights.

However, the Supreme Court noted that the restoration of a violated right must occur within the framework of the disputed legal relations. The obligation of the military unit to discharge the claimant goes beyond these legal relations and does not resolve the lawfulness of the act taken as a result of the conscription procedure. Such a method of protection is ineffective and creates a situation where the court’s decision cannot be executed.The Supreme Court emphasized that the conscription procedure is irreversible, and recognizing it as unlawful does not restore the previous status of the conscripted person. Therefore, the method of protection chosen by the claimant does not align with the essence of the violated right, and the conclusions of the lower courts regarding the satisfaction of the claim are erroneous.

Thus, the method of protection chosen by the claimant does not align with the essence of the violated right, and fulfilling this request will not lead to the restoration of such a right, which makes the conclusions of both courts regarding the satisfaction of the claim in this part erroneous.
Additionally, the fact that the claimant did not undergo the medical examination is not grounds for discharge from military service under Article 26 of the Law “On Military Duty and Military Service”.

Conducting a court hearing during an air raid alert in the absence of the parties is a violation of their right to participate in the trial and grounds for the cancellation of the court decision – Civil Cassation Court of the Supreme Court

The Supreme Court noted that the court must decide whether to postpone the hearing if an air raid alert is ongoing at the beginning of the court session and should assume that the absence of a party is due to objective and valid reasons, unless there is a request for the trial to proceed in their absence.

This decision was made by the Civil Cassation Court in a case where, on November 26, 2024, during the hearing, an air raid alert was declared. Despite this, the appellate court proceeded with the case, preparing a note stating that the parties did not appear at the court session.

The panel of judges of the Civil Cassation Court agreed with the arguments of the respondent’s cassation appeal, stating that when considering the case during an air raid alert, which started before the court session, the appellate court should have decided to postpone the case, applying the relevant procedural norms, considering the general principles of civil procedure, ensuring the guarantees of the right of individuals to participate in the trial of their case, as well as the court’s obligation to assist participants in realizing their procedural rights.

The conclusion of the appellate review in the absence of the parties’ representatives, who had objective obstacles to attending the court session due to the “Air Raid Alert” signal, indicates improper fulfillment of the appellate court’s duty to ensure the comprehensiveness, completeness, and fairness of the judicial review.

In canceling the appellate court’s decision and sending the case for a new appellate review, the Civil Cassation Court concluded that when deciding whether there are grounds to postpone the hearing in a case where an “Air Raid Alert” signal was declared at the beginning of the court session, the court should prioritize the preservation of life and health, and the court’s duty is to assist participants in exercising their procedural rights, including participation in the trial. It should also be assumed that the absent participant did not appear in the court session for objective and valid reasons, unless there is a request for the trial to proceed in their absence.

Family relationship between the representative of the seller and the buyer under the purchase agreement does not indicate the existence of a malicious agreement between the parties when entering into the contested transaction – Civil Cassation Court of the Supreme Court

The claimant filed a lawsuit seeking to declare the purchase agreement invalid, arguing that her attorney, based on a power of attorney, transferred the ownership of the land plot to her mother. The claimant noted that she did not receive any money and intended to alienate the unfinished construction on the disputed land as well. She believed that there was a malicious agreement made when entering into this contract, aimed at depriving her and her children of rights to the land and the building.

The courts of the first and appellate instances partially satisfied the claim, based on the fact that the land plot was alienated at a price lower than the market value, at a time when the relationship between the claimant and her civil partner had deteriorated.

However, the Civil Cassation Court of the Supreme Court overturned these decisions, stating that the presumption of legality of the transaction means it is considered lawful until proven otherwise. The presumption of legality can be refuted if the transaction is null and void or is declared invalid by the court.

The Supreme Court also clarified that in order to recognize a transaction as the result of a malicious agreement, the following signs must be proven:
An intentional conspiracy between the representative of the injured party and the other party to gain benefit.

Negative consequences for the principal and their disagreement with these consequences.
The representative’s actions are within the powers granted.

In overturning the decisions of the lower courts, the Supreme Court stated that the claimant did not prove the existence of a malicious agreement and that the absence of funds under the contract is not grounds for declaring it invalid. The court emphasized that the invalidity of the contract must be determined at the time of its conclusion, not due to improper performance of obligations under the contract.

Criminal Law Practice

Absence of agreements does not exclude abuse of authority or office: decision of the Joint Chamber of the Criminal Cassation Court of the Supreme Court

In case No. 757/11969/18-к, the Joint Chamber of the Criminal Cassation Court of the Supreme Court considered a case concerning the provision of preferential transportation tariffs to certain enterprises by Ukrzaliznytsia officials without proper grounds. As a result, the company lost more than UAH 69 million.
The defence argued that the defendants were not interested in benefiting from the carrier companies and had no agreements with them, so there was no crime under Article 364 of the Criminal Code of Ukraine in their actions.

However, the Joint Chamber of the Criminal Cassation Court of the Supreme Court explained that the fact of the presence or absence of certain agreements or contact links between the official and the person who received the unlawful benefit is not of criminal significance for the qualification of the official’s actions under the relevant part of Article 364 of the Criminal Code of Ukraine.
Criminal liability for abuse of power or office under Article 364 of the Criminal Code also arises if an official acted in the interests of a third party without informing that person of the content and nature of his or her actions.

The absence of a written notification of the NACP on the fact of failure to submit a declaration does not exclude the possibility of bringing a person to criminal liability

In case No. 629/5254/21, the Criminal Cassation Court of the Supreme Court cancelled the decision of the Court of Appeal, which closed criminal proceedings against a person who failed to file an annual declaration for 2020, and ordered a new trial.

Thus, the court of appeal ruled that in order to bring to criminal liability under Art. 366-3 of the Criminal Code of Ukraine, it is necessary to prove that the accused received a written notice from the NACP of failure to submit a declaration.

At the same time, the panel of judges of the Criminal Cassation Court of the Supreme Court, disagreeing with this position, stressed that the NAPC provides written notification to the declaring entity when the event of failure to submit the declaration has already occurred, which does not exempt the relevant entity from the obligation to submit such a declaration. At the same time, paragraph 2 of part 2 of Article 51-2 of the Law of Ukraine “On Prevention of Corruption” contains an imperative to simultaneously notify, among others, a specially authorised entity in the field of combating corruption of the fact of failure to submit a declaration by the relevant declaring entity for appropriate response.

In other words, if the prosecutor or investigator establishes that the person who was obliged to file the declaration intentionally failed to do so, this is sufficient to initiate a pre-trial investigation. In this case, the NACP’s notification is not a legally required prerequisite for criminal liability, but only one of the ways to inform the competent authorities of the violation.