News digest | JULY 2025

Corporate Law Practice

Reform of public-private partnerships in Ukraine: from PPP to PPC

On 30 July 2025, the President of Ukraine signed a key law No. 7508, which radically changes the mechanisms for attracting private capital to rebuild Ukrainian infrastructure. The document officially renames ‘public-private partnership’ (PPP) to ‘public-private partnership’ (PPP) and aims to resolve systemic problems that have resulted in only 22 of the 200 contracts signed being actually implemented.

The main changes include a radical reduction in procedures (from two years to 45-90 days), the introduction of an electronic procurement system, harmonisation with European standards and additional state guarantees for private partners. A simplified procedure will apply to recovery projects in medicine, transport, energy and education during the state of martial law and for a further seven years thereafter. A ‘deferred infrastructure’ mechanism has been introduced, whereby a private partner builds a facility at its own expense and the state gradually reimburses the costs, as well as the possibility of hybrid financing combining public, private and grant resources.

It is expected that the new PPP rules will attract up to USD 1 billion in investment in the coming years.

The President signed a law on factoring: state registration of assignment of claims is introduced

Law No. 4466-IX on improving the regulation of factoring in Ukraine, which radically changes the legal framework of the industry, has come into force. The document brings Ukrainian legislation closer to international standards and strengthens the protection of market participants.

The main innovations include the implementation of the provisions of the Model Law on Factoring of the International Institute for the Unification of Private Law. This will enable Ukrainian factoring to comply with best international practices and facilitate cooperation with international partners.

The law introduces mandatory state registration of the assignment of claims, which will significantly reduce the risk of fraud in factoring activities and increase market transparency. Participants will be able to check the status of claims and avoid double assignment.

The subject matter and content of factoring agreements are defined separately, priority is given to the assignment of monetary claims, and the regulation of trade factoring and financial debt transactions is differentiated. This will remove legal uncertainty and simplify law enforcement.

An important change is the licensing of activities related to the assignment of claims under consumer loans. Such companies must obtain a financial company licence with the right to grant loans, which will be incompatible with the provision of trade factoring services.

These changes create a legal basis for the development of a civilised factoring market and strengthen the protection of the rights of its participants in accordance with European standards.

Tax Law Practice | Tax Alert

The law that updates specific rules for the administration of personal income tax and local taxes has been adopted

On 16 July 2025, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “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 with a View to Improving Certain Provisions of Tax Legislation” (draft law No. 13157).

The text of the law signed by the Chairman of the Verkhovna Rada of Ukraine provides, in particular, for the following:

• Individual entrepreneurs and persons engaged in independent professional activities, acting as tax agents, must submit quarterly Tax Calculations of Income Accrued (Paid) to Individuals, and the Amounts of Tax Withheld From Them, as well as the Amounts of the Single Contribution Accrued, broken down by month;
• The possibility for combatants and persons with disabilities resulting from the war to include the housing rental expenses in their personal income tax rebate;
• Determination of prisoners of war as a separate category of non-resident individuals for personal income tax purposes. Tax agents responsible for the payment of personal income tax on remuneration for their work will be detention camps of prisoners of war, penal institutions, and remand centres of the State Penitentiary Service of Ukraine that accrue such income;
• Granting local taxpayers the right to adjust their tax liabilities for the relevant tax (reporting) periods (taking into account the limitation period, but not earlier than 2022) by submitting amended tax returns. In addition, tax notices-decisions on the payment of local taxes for the specified tax (reporting) periods shall be cancelled (revoked), and monetary obligations and tax debts shall be written off.

This adjustment option becomes available if the local self-government body, military/military-civilian administration adopts a decision during martial law to amend a previously adopted decision on the establishment of local taxes, fees, and tax benefits, or to grant tax exemptions from the payment of local taxes and fees, in accordance with which the previously established rates are reduced.

The law has been sent to the President of Ukraine for signature.

Special tax regime for seafarers: draft law has been registered

On 24 July 2025, draft law No. 13530 “On Amendments to the Tax Code of Ukraine to Encourage Seafarers to Support the Ukrainian Economy” was registered in the Verkhovna Rada of Ukraine.
This draft law proposes to introduce a new tax on seafarers’ income.

Key provisions of the proposed amendments include:

• Seafarers will have the right to choose a special tax regime for income received from performing their duties as seafarers on board a ship. The choice of this regime will be voluntary and exercised by submitting an application.
• This right will apply to seafarers who are citizens of Ukraine or stateless persons permanently residing in Ukraine, or citizens of other states who are residents of Ukraine. The special regime will not apply to crew members of military ships (vessels) of the military formations of Ukraine.
• The object of taxation for this tax will be the income of a seafarer received from the performance of their duties as a seafarer on a ship, regardless of the form of legal relations (employment contract, civil law contract, other forms).
• The tax base will be determined based on the basic monthly wage rates for seafarers established by the International Transport Workers Federation (ITF) in accordance with the ITF ILO Minimum Wage Scale.
• The proposed tax rate on seafarers’ income is 18 per cent, matching the standard personal income tax rate.
• Seafarers will also be subject to a military tax at a rate of 1 per cent.

The key benefit of the proposed tax regime is the possibility of exemption from seafarers’ income tax and military tax if they perform their duties on a seagoing vessel for a total of more than 183 days during a calendar year, provided that at least 90 per cent of the tax base is transferred to an account in a Ukrainian bank, with automatic conversion of these funds into the national currency at the exchange rate of the National Bank of Ukraine on the date of transfer, with the possibility of converting these funds into cash exclusively in Ukraine and without the possibility of transferring such funds abroad.

However, this exemption provision will not be applied during martial law.

Litigation Practice

The court cannot reduce the statutory minimum of 3% annual interest for late payment

In its Resolution of July 2, 2025, in case No. 903/602/24, the Grand Chamber of the Supreme Court clarified that the 3% annual interest stipulated by Part 2 of Article 625 of the Civil Code of Ukraine is a legally established minimum liability of the debtor for breach of a monetary obligation. This amount cannot be reduced by the court, even considering the circumstances of the case, unless otherwise provided by contract or law.

In the case under review, a contract for the performance of work was concluded between a municipal enterprise and a company. Later, based on a court decision, the debt was repaid; however, the claimant also sought to recover inflation losses and the 3% annual interest.

The courts of first and appellate instance partially upheld the claims, reducing the interest amount, taking in consideration the respondent’s repayment of the debt and their financial condition. In addition, part of the claims was dismissed due to the expiration of the limitation period.

The Grand Chamber of the Supreme Court disagreed with this approach, drawing attention to legislative changes related to quarantine and martial law. It emphasized that the limitation period in this case was extended, and therefore the claimant filed the lawsuit within the permissible time frame.

Regarding annual interest, the Grand Chamber emphasized that although the court may reduce the rate under certain conditions, this does not apply to the statutory minimum rate of 3% per annum. This rate is fixed and cannot be lowered by the court.

Ultimately, the Supreme Court found the claims for the recovery of inflation losses and three percent annual interest to be justified and deemed the reduction of the latter unfounded.

The time limit for filing a claim with an administrative court is calculated from the moment the person could have become aware of the violation of their rights

In its Resolution of July 3, 2025, in case No. 990/102/25, the Grand Chamber of the Supreme Court clarified the rules for calculating the time limit for filing a claim with an administrative court, particularly in the context of receiving electronic correspondence.

The claimant argued that the filing deadline had not been missed, as he only learned the content of the decision on February 18, 2025, when he opened the email containing the full text. However, the Grand Chamber disagreed, upholding the decision of the Cassation Administrative Court to return the claim due to a missed deadline.

The court reminded that under Article 120 of the Code of Administrative Procedure of Ukraine, the procedural period begins on the day following the event it is associated with. In this case, the claimant received the decision via email on February 14, so the time limit for filing the claim began on February 15, 2025. The mere fact that the claimant did not check his email for several days does not affect the starting point of the time calculation, as he could and should have learned the decision’s content at that time.

The Grand Chamber also noted that martial law is not, by itself, an automatic ground for restoring the missed deadline. The evaluation of such circumstances is carried out individually, considering the content of the motion for renewal. Air raid alerts are not considered valid reasons unless it is proven that they made it objectively impossible to file a lawsuit throughout the entire period provided by law.

The Cabinet of Ministers of Ukraine has updated the procedure for determining critically important enterprises for the purpose of employees reservation

Effective July 16, 2025, changes to the procedure for reserving conscripts came into force, as approved by Government Resolution No. 847 of July 14, 2025, “On Issues of Reserving Conscripts During Mobilization and Martial Law”. The document updates the criteria for recognizing enterprises, institutions, and organizations as critically important for the economy, public life, and defense needs during mobilization and martial law.

According to the amendments, the authority to designate enterprises as critically important depends on their organizational form and area of activity:

• Central executive authorities and other state bodies with jurisdiction over the entire territory of Ukraine are authorized to recognize as critically important those entities operating in the relevant national economic sector or implementing state policy.
  
• Regional, Kyiv and Sevastopol city state administrations (or military administrations if necessary) carry out such determinations regarding:
  • municipal enterprises;
  • enterprises located within the corresponding administrative-territorial unit and operating in the fields of agriculture, forestry or fisheries; extractive and processing industries; energy, water supply, waste management; construction, trade, transport, logistics, postal and courier services.

To obtain critical importance status, an enterprise that meets the established criteria (in particular, paragraph 2 of the Criteria) must apply to the authorized body — either central or local, depending on the above conditions.

These updates are mandatory as of the date of their official publication, July 16, 2025.

The law on the updated procedure for distribution of court costs and fees has come into effect

On July 16, 2025, Law No. 4508-IX “On Amendments to Certain Legislative Acts of Ukraine on Improving the Procedure for the Distribution of Court Costs and Court Fees” came into force.

The law aims to improve the approach to the distribution of court costs in commercial, civil, and administrative proceedings and enhance access to justice for individuals.

Key innovations include:

• Courts are now authorized to decide on the distribution of legal costs without notifying the case participants, which is expected to streamline proceedings.
• The grounds for exemption, reduction, deferral, or instalment payment of court fees have been clarified, taking into account the individual case circumstances, allowing courts to adopt a more flexible and equitable judicial approach.
• The Law “On Court Fees” has been supplemented with a new paragraph 2-1 of Article 4, defining court fee rates in bankruptcy (insolvency) cases.

The law introduces amendments to the Commercial Procedural Code, Civil Procedural Code, Code of Administrative Procedure of Ukraine, and the Law “On Court Fees”. The Eastern Commercial Court of Appeal prepared a detailed comparative table analyzing these updates.

President has signed law on multiple citizenship: key provisions established

On July 15, 2025, the President of Ukraine signed Law No. 4502-IX “On Amendments to Certain Laws of Ukraine to Ensure the Exercise of the Right to Acquire and Retain Ukrainian Citizenship”, which introduces legal mechanisms for the acquisition and retention of Ukrainian citizenship, including the possibility of multiple citizenship. The law will take effect on January 16, 2026.

The law introduces several significant changes:

• Multiple citizenship is defined as a person’s simultaneous belonging to the citizenship of two or more countries.
• Ukraine recognizes multiple citizenship in two cases:
  • when a citizen of Ukraine acquires the citizenship of a country included in a special list approved by the Cabinet of Ministers, taking into account, in particular, EU membership and sanctions policy towards the aggressor state;
  • when a foreign citizen from such a country acquires Ukrainian citizenship.
• All candidates for Ukrainian citizenship must pass exams (language, history, and constitutional basics) without exemptions or deferrals.
• Foreign military personnel serving in the Armed Forces of Ukraine under contract may apply for citizenship after one year of service during martial law.

The law is another step toward implementing an open policy for the Ukrainian diaspora and international partners, while simultaneously establishing national security safeguards.

Criminal Law Practice

Independence of the National Anti-Corruption Bureau of Ukraine and the Specialised Anti-Corruption Prosecutor’s Office has been restored

On 1 August 2025, the law сame into force, providing for updated institutional guarantees of independence for the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialised Anti-Corruption Prosecutor’s Office (SAPO).

The most significant amendments include:

• reinstation of NABU’s exclusive investigative jurisdiction — it is prohibited to assign the conduct of a pre-trial investigation of a criminal offence under the jurisdiction of NABU to another investigation body. This rule applies unless there are objective circumstances that make it impossible for NABU to operate or carry out a pre-trial investigation during martial law;
  
• establishing the key procedural powers of the Head of SAPO, including the authority to:
  
  • approve the extension of the term for pre-trial investigation up to 12 months;
  • notify high-ranking officials of suspicion;
  • assign pre-trial investigation to another body if objective circumstances prevent NABU from functioning or conducting an investigation during martial law;
  • approve plea agreements in criminal proceedings investigated by NABU detectives;
    
• restriction of procedural powers of the Prosecutor General, in particular, the Prosecutor General loses the authority to:
  • give binding instructions to NABU detectives, including instructions regarding access to materials of the criminal proceeding;
  • solely resolve jurisdictional disputes in proceedings that may fall under NABU’s investigative jurisdiction;
  • close criminal proceedings involving high-ranking officials.

Additionally, from now on, employees of NABU, SAPO, and other law enforcement bodies with access to state secret must undergo a polygraph examination every two years to determine whether they have been engaged in conduct, favouring the aggressor state.

Conduct of Investigatory (Search) Action at an Enterprise: What Businesses Should Be Aware Of

The conduct of investigatory (search) actions at business facilities is a serious challenge. In most cases, complications arise due to the staff’s unpreparedness, including: the absence of internal instructions, lack of awareness of their rights and obligations, and careless handling of documents or equipment.

Common mistakes made by employees during investigative (search) actions, particularly during searches, include:

• failing to verify documents before the commencement of investigative (search) action, particularly not examining the investigating judge’s ruling and the official IDs of authorised persons;
• lack of oversight of the conduct of investigative (search) actions, creating the risk of improper conduct by law enforcement officers;
• excessive communication with law enforcement personnel, including disclosing unsolicited information;
• emotional or aggressive behaviour of staff, or publishing photos, videos, or comments on social media.

For a detailed overview of common mistakes and practical guidance on how to avoid them, see the article by GOLAW Criminal Law Practice Counsel Kristina Kolchynska and Junior Associate Anastasiia Miroshnychenko.

The Polygraph in Criminal Proceedings: Effective Means of Proof or Unreliable Tool?

Despite its popularity in mass culture, the polygraph has no specific place in Ukraine’s criminal procedure. The law neither explicitly prohibits nor permits its use, which leads to limited use of polygraph examination results as evidence in criminal proceedings.

Technically, modern polygraphs record physiological indicators such as heartbeat, breathing, skin conductivity, etc. However, polygraph results are probabilistic and largely dependent on the examiner’s interpretation, which casts doubt on their objectivity and evidentiary value.

Nevertheless, the use of a polygraph is possible in practice, but only with the written consent of the person concerned. Importantly, refusal to undergo a polygraph examination may not be treated as a ground for procedural pressure or negative consequences for the participant in criminal proceedings. Furthermore, a defence attorney has the right to be present at all stages of interaction with law enforcement authorities, even if the person is summoned as a witness.

Judicial practice in Ukraine regarding the polygraph remains inconsistent. While certain judgments acknowledge the polygraph’s auxiliary role, others unambiguously exclude its results from the list of admissible evidence.

A similar approach is observed in other countries. In most jurisdictions, the polygraph is used only as a supplementary tool, mainly at the pre-trial stage. Even in the United States, where the polygraph is frequently used, its results are generally inadmissible as evidence in court.

For more information on the use of polygraph examinations in criminal proceedings in Ukraine, read the article by GOLAW Criminal Law Practice Counsel Kristina Kolchynska and Junior Associate Mark Kotiv.