News digest | December 2025

Corporate Law Practice

The National Development Institution began operating on 1 January 2026

On 1 January 2026, the Law of Ukraine No. 4622-IX “On the National Development Institution” entered into force, and the relevant institution commenced its operations.

The primary purpose of the National Development Institution is to support Ukraine`s economic and social development and recovery by assisting businesses, implementing development programmes and providing financial aid to targeted groups.

The National Development Institution will provide support to micro, small and medium-sized enterprises and other designated beneficiaries in the form of loans, guarantees, grants and non-repayable assistance. It will also develop and implement development programmes and projects at the national, regional and international levels.

The institution will finance its operations from state and local budgets, international assistance and other legal sources. The minimum state share in the authorised capital of the institution is to be 51%.

To ensure transparency and accountability, an annual activity report and financial statements, together with the relevant audit opinion, will be published on the institution’s official website.

The mechanism for compensation of business losses caused by military actions has been launched

On 29 November 2025, the Cabinet of Ministers of Ukraine Resolution No. 1541 entered into force, approving the procedure for granting partial compensation for the value of property belonging to business entities that was damaged or destroyed as a result of the armed aggression of the Russian Federation, as well as partial compensation of insurance premiums under war-risk insurance contracts. Although the document has been in force for more than 30 days, its provisions will only apply from 1 January 2026, which is when businesses will be able to submit applications and receive the relevant payments.

Under the procedure, the cost of damaged or destroyed property of business entities operating in high-risk areas, including the Dnipropetrovsk, Donetsk, Zaporizhzhia, Mykolaiv, Odesa, Poltava, Sumy, Kharkiv, Kherson and Chernihiv regions, may be compensated, provided the assets are not located in temporarily occupied territories.

In addition, partial compensation of insurance premiums under war-risk insurance contracts is available for businesses that have concluded such contracts within Ukraine.

The resolution lays down a set of conditions, including eligibility requirements for businesses seeking compensation, the maximum limits of payments, and the procedure for submitting applications – all designed to ensure a clear and timely process for reimbursing losses.

The President signed a law on the development of financial inclusion

On 25 December 2025, the President of Ukraine signed Law No. 4465-IX “On Amendments to Certain Legislative Acts of Ukraine Regarding the Development of Financial Inclusion”. The law was prepared by the Verkhovna Rada’s Committee on Finance, Tax and Customs Policy and has been officially published.

The law establishes the legal framework for a new category of banks – financial inclusion banks – which will operate under a restricted banking licence. The primary goal of these institutions is to expand access to financial services for individuals and businesses that currently face limited access to traditional banking services, including people in frontline, de-occupied and remote areas, socially vulnerable groups and micro-enterprises.

The document also outlines the requirements for obtaining a restricted banking licence for financial inclusion banks and the regulation of their activities, including criteria and operational rules. The National Bank of Ukraine is empowered to promote financial inclusion and set the regulatory standards for these new market participants.

Financial inclusion banks will be able to offer banking and other financial services to individuals, business entities, community and charitable organisations, as well as public authorities and local government bodies.

Government approves package of regulations to launch the “Defence City” regime

The Government has adopted a set of resolutions defining the operational framework for the special legal regime known as “Defence City”, aimed at supporting defence industry enterprises. These resolutions follow the earlier adoption of the relevant laws by the Verkhovna Rada and lay the groundwork for practical implementation.

The approved regulations set out the procedures for enrolling companies into the regime’s register, the eligibility criteria for incentives, and the processes for cooperation with the Ministry of Defence and other authorities. They also establish how data should be submitted, the basis for granting tax and customs benefits, and the standards for transparency and reporting by participants.

In addition, the documents define the information exchange procedures between state bodies and participants of “Defence City”, identify the authorities responsible for maintaining the register, and outline compliance monitoring arrangements. Clear deadlines and reporting formats are included to ensure predictability and equal treatment for all participants.

The resolutions will enter into force concurrently with the primary laws on “Defence City” and enable the practical launch of the regime, including the submission of initial applications from qualifying enterprises.

The introduction of this regulatory package is intended to facilitate the operational start of “Defence City” as a state support mechanism for the defence sector, promoting manufacturing capacity and investment growth within the industry.

From 1 January 2026 Ukraine will stop using certain EU geographical indications for its own products

From 1 January 2026, the ten-year transition period provided for in the Association Agreement between Ukraine and the European Union will end, and Ukraine will no longer apply several EU geographical indications when labelling similar products of Ukrainian origin.

This change affects designations that were previously used for Ukrainian alcoholic beverages and wines that matched EU protected names. Specifically, it covers wine geographical indications such as Champagne, Madeira, Porto, Sherry, Marsala, Malaga and Tokaj, and spirit drink geographical indications including Cognac, Armagnac, Calvados, Grappa and Anis Português.

As a result, Ukrainian producers must rename wines and spirits so that their labelling does not include the protected EU indications and does not imply a connection with the EU regions associated with those names.

Products labelled under the old terms before 1 January 2026 may still be sold in Ukraine until existing stocks are exhausted, but continued use of those designations after that date is prohibited.

These requirements form part of Ukraine’s obligations to protect geographical indications under the Association Agreement and to align national laws with EU intellectual property standards.

Tax Law Practice | Tax Alert

Planned ratification of the Agreement between Ukraine and Slovenia on technical and financial cooperation with tax benefits

On December 18, 2025, Draft law “On Ratification of the Agreement between the Government of Ukraine and the Government of the Republic of Slovenia on Technical and Financial Cooperation” was registered in the Verkhovna Rada of Ukraine.

The purpose of this Agreement is to support and simplify programmes / projects implemented in Ukraine and financed in whole or in part by Slovenia.

In particular, the Agreement provides that professional services, equipment and materials provided within the framework of programmes and projects between Slovenia and Ukraine are exempt from all direct and indirect, national and local taxes and fees applicable in Ukraine, including value added tax.

The document also stipulates that goods necessary for the implementation of programmes and projects under the Agreement may be imported into the customs territory of Ukraine and exported after completion of the work without payment of customs duties, taxes and other charges having similar effect, including customs payments. In the event of alienation of these goods in the customs territory of Ukraine, they are subject to taxation in accordance with the legislation of Ukraine.

Changes in the taxation of imports of goods for security and defence have come into force

On December 26, 2025, the Law of Ukraine No. 4709-IX “On Amendments to Subsection 2 of Section XX “Transitional Provisions” of the Tax Code of Ukraine Regarding the Taxation of Value Added Tax on Transactions Involving the Importation of Goods into the Customs Territory of Ukraine for Security and Defence Needs” came into force.

In particular, the document provides for:

• expansion of the list of goods exempt from VAT upon import (combat simulators have been added to the list of goods that can be imported without paying VAT under the exemption for security and defence needs);
• extension of the preferential VAT regime to the import of goods for security and defence purposes, in particular, such exemptions now apply not only to defence procurement contracts (agreements);
• extension of the preferential VAT regime to the modernisation of defence equipment;
• establishment that in the event of loss, destruction or recognition as unusable of goods imported into the customs territory of Ukraine with the application of a VAT exemption, such exemption shall not be lost provided that the relevant circumstances are duly documented before the customs authority.

Also, on December 26, 2026, Law of Ukraine No. 4710-IX “On Amendments to the Customs Code of Ukraine Regarding the Improvement of the Procedure for the Collection of Customs Payments and the Performance of Certain Customs Formalities for Goods Imported into the Customs Territory of Ukraine for Security and Defence Needs” came into force.

In particular, it provides for exemption from import duties for developers and manufacturers of drones, mine clearance machines, countermeasures against technical reconnaissance and other defence goods, establishes customs privileges for their modernisation, determines the procedure for maintaining privileges in the event of a change in intended use, as well as in cases of loss, destruction or recognition of goods as unsuitable due to accidents or force majeure, subject to proper documentary evidence.

The return of security activities to the simplified taxation system is planned

On December 30, 2025, Draft law No. 14348 “On Amendments to Subparagraph 291.5.1 of Paragraph 291.5 of Article 291 of the Tax Code of Ukraine” was registered in the Verkhovna Rada of Ukraine.

The draft law provides for the removal of restrictions on the right of security service providers to be single tax payers in groups one to three.

We wrote about the establishment of this restriction earlier.

Mandatory VAT registration for single tax payers is planned

On December 18, 2025, the Ministry of Finance of Ukraine published Draft law “On Amendments to the Tax Code of Ukraine Regarding the Registration of Single Taxpayers as Value Added Tax Payers”.

In particular, the draft law stipulates that if a single tax payer in groups 1-3 (except for e-residents) reaches a turnover of UAH 1,000,000, such a person is obliged to register as a VAT payer by submitting an application to the tax authorities no later than the 10th day of the month following the month in which the relevant limit was reached. In this case, a single tax of 3% will be set for the relevant persons from the first day of the month in which the relevant application is submitted.

The start of the application of the new waste classification for taxation has been postponed

By the Resolution of the Cabinet of Ministers of Ukraine “On Amendments to Clause 2 of the Resolution of the Cabinet of Ministers of Ukraine No. 1102 dated October 20, 2023”, the application of the Procedure for the classification of waste for taxation purposes and the National list of waste has been postponed until January 01, 2027.

Previously, the date of commencement of application of the relevant documents was January 01, 2026.

Litigation Practice

The Constitutional Court of Ukraine has found unconstitutional the statutory three-month time limit for an employee to bring a court claim for the recovery of wages

On 11 December, the Grand Chamber of the Constitutional Court of Ukraine considered a case brought on the constitutional petition of the Supreme Court concerning the constitutionality of the first part of Article 233 of the Labour Code of Ukraine (the “Labour Code of Ukraine”) and adopted Decision No. 1-р/2025.

It is noted that, pursuant to the first part of Article 233 of the Labour Code of Ukraine, “an employee may file an application for the resolution of a labour dispute directly with the court within a three-month period from the day when he became aware, or should have become aware, of the violation of his right, except in cases provided for in the second part of this Article”.

Having examined the issues raised in the constitutional petition, the Court concluded that the challenged provision of the Code, insofar as it establishes a three-month time limit for an employee to apply to a court for the recovery of wages and other payments due to the employee, does not comply with the Constitution.

The Constitutional Court of Ukraine noted that the legislature has discretion to determine limitation periods for an employee to apply to court in labour disputes and may establish different time limits for different categories of such disputes, taking into account the nature of the disputed legal relationship.

Although the introduction of a time restriction for the exercise of a statutory right is a matter within the legislature’s discretion, such a restriction is permissible only insofar as it does not impair the essence of the right and is established for a legitimate aim; in that case, it is fair and objectively justified.

The Court indicated that the legislature linked the time limit for applying to court only to acts formalising the termination of employment relations, and did not take into account the specifics of ongoing legal relationships. Thus, an employee who remains in an employment relationship, in the event of systematic non-payment of remuneration or periodic delays in payment, would have to bring claims every three months in order not to lose the right to judicial protection.

Such legislative regulation fails to strike a balance between the interests of the parties to the employment relationship, contradicts the principle of equality, and causes legal uncertainty, thereby depriving the employee of effective protection of the constitutionally guaranteed right to timely remuneration for work.

The Administrative Cassation Court within the Supreme Court expressed its legal position on the lawfulness of conscription (enlistment) into military service of a person who had not reached the age of twenty-five

The disputed issue considered by the Administrative Cassation Court within the Supreme Court in its ruling of 14 November 2025 in case No. 460/5251/24 was the lawfulness of calling up the claimant at the age of twenty-three under mobilisation and enrolling him on the rolls of a military unit, as the claimant had not given voluntary consent to be called up during mobilisation and had not signed a contract for military service.

The Court noted that in the period from 24 February 2022 to 18 May 2024 (prior to the entry into force of Law No. 3633-IX) there existed legal inequality: citizens of conscription age up to twenty-seven who were found unfit for military service in peacetime but limitedly fit in wartime were included in the register of persons liable for military service and could be mobilised. If, following a repeated medical examination by the military medical commission, they were found fit and had no other grounds for deferment or reservation, they were subject to call-up.

On 18 May 2024, Law No. 3633-IX entered into force, which reduced the maximum conscription age from twenty-seven to twenty-five and expanded and refined the grounds for granting deferments.

Parts five and six of Article 23 of the Law of Ukraine “On Mobilisation Preparation and Mobilisation” (as amended by Law No. 3633-IX) provide that persons liable for military service who have completed basic combined-arms training in accordance with Article 10-1 of the Law on Military Service, or basic military service, and persons liable for military service from among citizens who have performed military service and were discharged into the reserve due to release from captivity, are not subject to call-up for military service during mobilisation until reaching the age of twenty-five.

The Court drew attention to the fact that prior to 18 May 2024 the age criterion (twenty-five years) applied exclusively to conscripts, whereas other categories of persons liable for military service under twenty-five (in particular, those enrolled in the reserve following a military medical commission assessment) were subject to call-up for military service during mobilisation; and that from 18 May 2024 the twenty-five-year age criterion applies exclusively to conscripts and to persons who became liable for military service as a result of completing basic combined-arms training or basic military service, and to citizens who performed military service and were discharged into the reserve due to release from captivity.

It was established that the claimant, having been exempted from compulsory military service as “unfit in peacetime, limitedly fit in wartime”, had had the status of a person liable for military service since 26 April 2018; therefore, after his fitness was confirmed by the military medical commission (and in the absence of any deferment/reservation), his call-up during mobilisation is lawful.

Compensation for a share in jointly owned housing: the Grand Chamber of the Supreme Court emphasised that the court must take into account the actual solvency of the person from whom it is recovered

The claimant owned a three-fifths (3/5) share in the title to the apartment, while the defendants each owned a one-fifth (1/5) share in that apartment. The defendants were strangers to her, which made joint ownership and use of the apartment impossible, and the defendants ignored the claimant’s proposals to buy out their shares. The claimant agreed to the termination of her ownership right to her share of the apartment in exchange for payment to her of monetary compensation equal to the value of such property.

The court of first instance dismissed the claim, as the defendants did not have the financial capacity to pay such compensation. By contrast, the appellate court allowed the claim, proceeding on the basis that the defendant’s solvency (or willingness) is irrelevant to the resolution of a dispute on the recovery of compensation for a share in the title to an indivisible thing.

Upon review of the courts’ decisions, the Grand Chamber of the Supreme Court concluded that, when determining disputes brought by one co-owner seeking termination of their right to a share in jointly owned property constituting housing, by way of receiving from the other co-owners monetary compensation for the value of their share (the physical division of which is impossible), it is necessary to take into account the financial position of the defendant(s), namely their ability to pay compensation for the value of the share in respect of which the claimant’s right is terminated and transferred to the defendant(s), and whether enforcement of the relevant judgment awarding compensation would lead to enforcement being levied against the very share the title to which is transferred to the other co-owners by virtue of the court decision.

In resolving disputes concerning termination of a right to a share in real estate, especially where the property constitutes the only home, the specific nature of such property must be taken into account and the balance of the parties’ interests must be assessed, with due regard to the solvency of the person on whom the obligation to pay compensation for the other co-owner’s share is imposed.

The Grand Chamber of the Supreme Court reached this conclusion in a case concerning the allocation of a share in an apartment by way of payment of compensation (ruling of 10 December 2025 in case No. 466/2128/23).

The Constitutional Court of Ukraine: Grounds for prosecutors’ representation of the State’s interests in court have been restricted

On 03 December 2025, the Second Senate of the Constitutional Court of Ukraine adopted Decision No. 6-р(II)/2025, by which it found certain provisions concerning prosecutors’ representation of the State’s interests in court to be unconstitutional.

Having examined the issues raised in the constitutional complaint, the Constitutional Court of Ukraine held that paragraphs one, two and three of Part Four of Article 23 of the Law of Ukraine “On the Prosecutor’s Office” dated 14 October 2014 No. 1697–VII, as amended (the “Law”), which set out the procedure and conditions for a prosecutor to represent the interests of an individual or the State in court, are constitutional.

At the same time, the Constitutional Court of Ukraine found unconstitutional certain provisions of the Law that enabled a prosecutor to represent the State’s interests in court on the grounds that such interests were not protected, or were improperly protected, by a state authority, a local self-government body, or another public authority within whose competence the relevant powers fall.

The Constitutional Court of Ukraine further noted that the “exceptional cases” in which a prosecutor may represent the State’s interests relate only to circumstances that are extraordinary and atypical by their legal nature, and that defining such cases falls within the legislature’s discretion.

The provisions found unconstitutional will cease to have effect as of 01 January 2027. At the same time, this decision does not apply to legal relationships that arose while the relevant provisions were in force and that continue to exist until they lose effect.

Parties to an electricity procurement contract may repeatedly increase the price where it fluctuates on the market, but the cumulative increase must not exceed 10% of the price agreed at contract signing – the Grand Chamber of the Supreme Court

The overall increase in the price of goods under consecutive amendments to a procurement contract (where the market price fluctuates) may not exceed 10% of the price specified in the contract, including in the procurement of petrol and diesel fuel, natural gas, and electricity.

This conclusion was reached by the Grand Chamber of the Supreme Court in its ruling of November 21, 2025 in case No. 920/19/24.

According to the circumstances of the case, a prosecutor filed a claim against an energy supplier seeking to invalidate a number of supplemental agreements to a contract for the supply of electricity to a consumer, concluded following a public procurement procedure on the “Prozorro” electronic platform, as well as to recover excessively paid budget funds.

The prosecutor argued that the parties had executed a series of supplemental agreements increasing the unit price, as a result of which the electricity price increased by more than 10% (and by 100.75% in total), while the volume of supply was reduced, which, in the prosecutor’s view, was contrary to clause 2, part 5, Article 41 of the Law of Ukraine “On Public Procurement”.

The lower courts granted the claim in full, noting that the overall increase must not exceed 10% of the price of the goods as determined by the parties when concluding the contract following the procurement procedure.

Upon review, the Grand Chamber of the Supreme Court concluded that clause 2, part 5, Article 41 of the Law sets out the rules for amending a procurement contract without conducting a new procurement procedure, in particular by permitting amendments in the event of an increase in the price of goods, provided that the cumulative increase in price under consecutive amendments does not exceed the statutory maximum (threshold) percentage of the amount specified in the procurement contract. Under clause 2, part 5, Article 41 of the Law, this maximum is capped at no more than 10% and is not to be applied separately to each individual amendment as it is made.

The Grand Chamber of the Supreme Court agreed with the findings of the lower courts that the disputed supplemental agreements should be declared invalid, as they provided for electricity price increases exceeding the maximum 10% limit and lacked proper documentary substantiation.

Criminal Law Practice 

Seizure of assets in foreign banks: legal ways to protect your interests?

Seizure of assets in transnational criminal proceedings remains one of the key tools for combating corruption, money laundering, and organised crime. At the same time, the seizure of property located abroad is significantly complicated by differences in procedural and evidentiary standards across jurisdictions.

A Ukrainian court judgment ordering the seizure of property does not have a direct extraterritorial effect. Freezing assets abroad requires an order from a foreign authority, known as a freeze order. Such an order can be obtained through international legal assistance using treaties, conventions, or the reciprocity principle.

Building on this, international asset seizures require strict compliance with all procedural requirements and a robust evidentiary basis.

In practice, when can an asset seizure order typically be lifted? If it is imposed without sufficient grounds, the principle of proportionality is violated, the procedure for international legal assistance is not followed, the arrest has already been cancelled in Ukraine, or there is no connection between the arrested assets and the criminal proceedings.

The key practical conclusion is that effective protection requires concurrent action in both Ukraine and the jurisdiction where the assets are located. This involves coordination with foreign counterparts and the deployment of available international legal cooperation mechanisms.

For more details on the mechanisms of asset seizure in foreign jurisdictions, standards of proof, and defence tools, take the next step – see the article by GOLAW Partner, Head of Criminal Law and White Collar Defence practice, Attorney at law Igor Glushko.

Distinguishing abuse of power or official position under Article 364 of the Criminal Code of Ukraine from other offences: clarification by the Supreme Court

On 2 December 2025, in case No. 686/7896/23, the Cassation Criminal Court of the Supreme Court clarified how to distinguish abuse of power or official position (Article 364 of the Criminal Code of Ukraine) from other violations in official duties.

The court emphasised that the decisive factor for this offence is the conscious (intentional) commission of actions contrary to the interests of the service. The erroneous actions of an official that resulted in unlawful benefits being received by third parties do not constitute abuse of power or official position. Such erroneous actions are not characterised by intentional guilt, which is clearly mandatory for the offence of abuse.

An official’s intent to obtain an unlawful benefit, or his/her interest in another person gaining such a benefit, is what sets abuse of official position apart from other breaches performed during duties. Criminal liability does not arise because a decision or conduct could later be disputed or overturned in court.