News digest | July 2026

Corporate Law Practice

The Government has expanded the list of Ukrainian industrial equipment for which businesses can receive a 15% purchase cost compensation

The Cabinet of Ministers of Ukraine adopted Resolution No. 853 on 1 July 2026, expanding the list of products eligible for the partial compensation program covering 15% of the cost (excluding VAT) under the “Made in Ukraine” state policy.

The program now includes 18 new types of Ukrainian-manufactured equipment and machinery. Among them are chassis-based vans, tippers, mobile cabin trailers, cherry pickers, combined road maintenance and street-sweeping vehicles, communal water treatment plants, specialised equipment for pothole repairs, industrial ventilation and filtration systems, welding equipment, and heating furnaces, amongst others.

Currently, the list of machinery and equipment eligible for the 15% state compensation features 1,354 technical items from 50 Ukrainian engineering enterprises.

The agreed contract price for machinery or equipment between the seller and buyer may now vary by up to 15% from the guide price on the list. This variation is permitted in cases of fluctuating costs for components, raw materials, energy resources, labour, manufacturing, or distribution.

Overall, the scheme applies to equipment with a minimum level of Ukrainian localisation of 40%. To claim the compensation, the buyer must purchase the equipment from the List through one of 29 authorised banks and submit a relevant application alongside supporting documentation. Manufacturers seeking to include their products on the List must submit an electronic application and financial and technical documentation to the Ministry of Economy.

Government updates public and defence procurement rules for martial law

The Cabinet of Ministers of Ukraine has adopted Resolution No. 957 of 15 July 2026, introducing amendments to the specific procedures governing public and defence procurement. Most of the new provisions come into force on 01 September 2026.

A key revision is the reinstatement of the mandatory negotiated procedure instead of concluding direct contracts in exceptional cases – such as cancelled tenders due to a lack of bidders, absence of competition for technical reasons, or urgent necessity. Going forward, the electronic system will once again require the publication of a notice of intent to award a contract, with clear timeframes set for appealing such decisions.

At the same time, the Government has removed the mandatory use of Prozorro Market for food procurement, giving contracting authorities the freedom to choose between the electronic catalogue and open tenders. Additionally, the minimum deadline for submitting tender proposals in open procedures has been extended to at least 15 days for goods and services as well as works.

Special focus in the resolution is placed on the energy sector and transparency in construction. The Government introduced a special clause 9-2, which permits direct contracting without competitive tendering until 31 December 2026 for purchasing energy equipment (turbines, generators, boiler systems) under Comprehensive Resilience Plans, as well as for protecting critical infrastructure objects. Furthermore, to enhance cost control, mandatory publication on Prozorro of completed construction works certificates and cost statements within 5 working days of signing has been introduced for contracts exceeding UAH 10 million. In addition, the Cabinet of Ministers has extended exemptions from local content requirements for energy equipment procurement until the end of 2026, specifically for mitigating the aftermath of emergency situations in the energy grid.

Ministry of Defence opens access for manufacturers to eight military technologies

The Ministry of Defence of Ukraine has made eight technologies developed within the defence institution and the Armed Forces available for licensing. This decision will allow Ukrainian manufacturers to acquire the rights to use these developments to scale up the production of defence goods and supply them to the Defence Forces. The transfer of technologies is being conducted as part of an experimental project approved by Cabinet of Ministers Resolution No. 1310.

The solutions available for licensing include the Octopus interceptor drone, a guided munition, the “Vitryak” drone detector, as well as communications, control, and terminal guidance systems for unmanned systems and ground robotic complexes. Descriptions of all the developments have been listed in a dedicated restricted-access section of the Brave 1 portal for security reasons. Additionally, during the fourth quarter of 2025, the Ministry of Defence granted 30 licenses to manufacturers for the use of military technologies.

To obtain the right to use these developments, manufacturers must submit an expression of interest via the Brave 1 portal, provide documentation demonstrating compliance with the project criteria, and enter into an agreement with the Ministry of Defence. If necessary, companies may review the technical documentation beforehand by signing a non-disclosure agreement with the developer, after which they submit a follow-up notice to conclude the final contract.

The Ministry of Economy has presented a draft law on the taxonomy of sustainable economic activities and sustainable investments

The Ministry of Economy and Environment of Ukraine has presented the draft Law of Ukraine ‘On the Taxonomy of Sustainable Economic Activities and Sustainable Investments’, which is intended to form the basis for the implementation in Ukraine of European rules on sustainable finance and ESG regulation. The draft law has been drawn up in line with European Union approaches and aims to harmonise Ukrainian legislation with EU requirements. 

The document provides for the creation of a unified system for classifying types of economic activity according to environmental sustainability criteria. Such a system will enable the state, banks, investors and businesses to apply consistent approaches to the assessment of investment projects, increase the transparency of the financial market and minimise the risks of ‘greenwashing’ – the unfounded presentation of activities as environmentally sustainable.

It is expected that, following the adoption of the law, the taxonomy criteria will be used when financing Ukraine’s recovery projects, attracting international investment and implementing ‘green’ transition programmes. For Ukrainian businesses, this will mean the gradual introduction of new requirements for disclosing information on the sustainability of projects and compliance with EU environmental standards.

Tax Law Practice | Tax Alert

Electronic Traceability and Excise Marking of Tobacco Raw Materials: New Draft Law Submitted to Parliament

On July 20, 2026, Draft Law No. 15372-1 “On Amendments to the Tax Code of Ukraine and Certain Other Laws of Ukraine to Enhance Control over the Production and Circulation of Tobacco Raw Materials and to Improve the Application of the Risk-Based Approach in Financial Monitoring” was registered with the Verkhovna Rada of Ukraine.

In particular, the draft law introduces a number of amendments relating to the taxation of tobacco raw materials, including:

• electronic excise stamp marking: this involves applying graphic elements of the excise stamp to the packaging (bale, bag, box, etc.) containing information about the manufacturer, grade, weight, place of production, and moisture content;
• implementation of electronic traceability: the system will contain information on transactions involving electronic excise stamps, inventory balances, excise documents, the use of raw tobacco in production, and its movement.

Provided the bill is adopted by Parliament, the provisions regarding the labeling of tobacco products with electronic excise stamps will take effect on July 1, 2029.

Transport Tax Declaration Form: Amendments Have Entered into Force

On July 21, 2026, two orders of the Ministry of Finance of Ukraine came into effect, amending the transport tax declaration form: order No. 313 dated June 12, 2026, and order No. 353 dated July 2, 2026.

Order No. 313 sets forth a revised version of the return form.

The updated transport tax declaration form introduces the possibility of reporting transport tax exemptions granted under decisions of local self-government authorities.

Previously, the form did not provide for this option, although the requirement to report in tax returns the amounts of tax not paid due to tax exemptions has been in effect since 2020.

Order No. 353 corrects technical inaccuracies in the aforementioned transport tax declaration form – specifically, the line numbering in the table of Section Two and certain footnotes.

Amendments to Fiscal Receipt Forms Proposed

On July 31, 2026, the Ministry of Finance of Ukraine published the draft order “On Approval of Amendments to the Regulations on the Form and Content of Payment Documents/Electronic Payment Documents”.

In particular, the document provides for the following changes:

• adding the IMEI (International Mobile Equipment Identity) to the forms of receipts and invoices, which must be indicated in payment documents when selling mobile phones and smartphones;
• clarification of the details on the fiscal cash register receipt for transactions involving the acceptance of funds for subsequent transfer (Form No. ФКЧ-5), specifically regarding the option to indicate the recipient’s name and the account number opened with a non-bank payment service provider;
• the format for displaying the time in the transaction details and the QR code on the fiscal receipt has been changed: seconds will no longer be displayed.

If approved, this order will take effect on January 1, 2027, but not earlier than the date of its official publication.

eExcise System: Testing of Excise Tax Payment Continues

On July 24, 2026, the State Tax Service of Ukraine announced the continuation of testing services for the payment of excise tax through the electronic system for the circulation of alcoholic beverages, tobacco products, and liquids used in electronic cigarettes (“eExcise”).

Test payments are made using unique identifiers to new budget accounts opened by the State Treasury Service of Ukraine for the analytical accounting of such revenues and are available only to manufacturers and importers. The remaining functionality – including the creation, correction, and verification of electronic documents, updated versions of application programming interfaces (APIs), and the classification of economic operators – is open to all business entities engaged in the circulation of excise goods.

The test phase will last through October 11, 2026, inclusive; participation is not mandatory.

Full implementation of the system, which involves replacing paper excise stamps with electronic ones, is scheduled to begin on November 1, 2026.

Litigation Practice

The Ministry of Justice has introduced a full cycle of automated debt recovery

On 14 July 2026, Order No. 1837/5 of the Ministry of Justice of Ukraine, dated 9 July 2026, came into force, refining the mechanism for the automated seizure of funds and introducing a fully-fledged procedure for enforcing recovery against debtors’ assets. The document was adopted to give effect to Law No. 4833-IX on the digitalisation of certain stages of enforcement proceedings.

Whereas the previous rules provided mainly for the automated seizure of funds, the procedure now covers the entire cycle of enforcement actions – from identifying the debtor’s accounts to the compulsory debiting of funds and their transfer to the recovering party through the automated enforcement system, without any paper-based document flow.

The range of participants has also been broadened. In addition to banks, the rules now extend to non-bank payment service providers, electronic money issuers and other financial institutions, and electronic money is henceforth treated on a par with ordinary funds.

Banks and other payment service providers must check hourly for new documents from enforcement officers and must respond to a request concerning a debtor’s accounts whitin one hour of working time at the latest. Data is exchanged through software interfaces using qualified electronic seals.

The National Council has updated the rules on media licensing in wartime and clarified the grounds for revoking temporary broadcasting permits

By Decision No. 1838 of 9 July 2026, the National Сouncil of Ukraine on Television and Radio Broadcasting amended the Regulation on the Specifics of Licensing and Registration in the media sphere during a state of martial law or emergency and also updated the List of Territories with a special broadcasting regime.

The decision was published on 10 July, while the underlying document itself has been in force since May 2023 and sets out the special procedures governing the regulator’s work in wartime conditions.

The amendments concern primarily those licensees that operate in areas of active hostilities, in temporarily occupied territories, or that have been affected by wartime restrictions.

Licensees whose transmitters are located in zones of active hostilities may apply to the National Council to postpone the deadline for commencing broadcasting, to suspend broadcasting temporarily and to set the duration of such suspension, provided that they explain the reasons and document the circumstances making operation impossible.

This option is available both to television and radio broadcasters that use the radio frequency spectrum and to media entities that broadcast without using frequencies, provided that their main stations are located in such areas.

The document also sets out more clearly the grounds for revoking a temporary broadcasting permit. Such grounds now include, in particular, the inclusion of a territory in the list of temporarily occupied territories under Order No. 376 of the Ministry of Development of Communities and Territories of 28 February 2025. A further ground is the completion of the retuning of broadcasting frequencies or channels where the relevant radio frequency bands were previously released for the needs of the State’s defence and security.

The status of audiovisual media founded by the Ministry of Defence of Ukraine is regulated separately. Such media retain the ability to operate under the distinct rules laid down by the Law of Ukraine “On Media”.

The lawfulness of a dismissal for absenteeism is assessed solely on the ground stated in the order – Civil Cassation Court of the Supreme Court

A dismissal for absenteeism cannot be found lawful where the court justifies it on a different ground – the non-performance or improper performance of employment duties – since such non-performance cannot be classified as absenteeism. The burden of proving a lawful ground for dismissal rests with the employer, and a court is not entitled to hold a dismissal lawful on the basis of circumstances with which the employer did not connect it.

This conclusion was reached by the Supreme Court, sitting as a panel of judges of the First Judicial Chamber of the Civil Cassation Court, in its judgment of 8 July 2026 in case No. 538/1991/23.

In the case under review, the general director of a company – for which remote working had been introduced by order for the duration of martial law was dismissed for absenteeism under clause 4 of part 1 of Article 40 of the Labour Code of Ukraine on account of being absent from the workplace for three days.

The courts of the lower instances dismissed the claim, with the court of appeal reasoning that the claimant had not proved that he had in fact performed his work remotely.

The Supreme Court did not agree with that approach. It observed that, by reproaching the claimant for the lack of evidence of work performed remotely, the court of appeal had in effect identified a ground for dismissal other than that stated in the order – namely the non-performance of employment duties, which does not constitute absenteeism.

Moreover, the finding that the employee had not worked remotely was not supported by proper evidence: neither the order nor the job description imposed any obligation to report on remote work, and the employer had not proved that such work had been duly organised. In view of this, the court of appeal’s judgment on the merits of the dispute is premature.

Following its consideration of the case, the Civil Cassation Court of the Supreme Court partially allowed the employee’s cassation appeal, set aside the court of appeal’s judgment and remitted the case to the court of appeal for new consideration.

Court fees: may a court recover an underpayment after the dispute has been decided on the merits? – Joint Chamber of the Commercial Cassation Court of the Supreme Court

The compulsory recovery, in favour of the State Budget of Ukraine, of a court fee underpaid by the claimant, by means of an additional judgment, is permitted only where the grounds specified in part 2 of Article 163 of the Commercial Procedure Code of Ukraine are present.

In all other cases – in particular where an underpayment is discovered after judgment on the merits of the dispute has been delivered – the court has no right to recover the unpaid (underpaid) court fee, including by means of an additional judgment, and the claimant’s procedural obligation to pay the fee is deemed to have ceased.

This conclusion was reached by the Supreme Court, sitting as the Joint Chamber of the Commercial Court of Cassation, in its judgment of 19 June 2026 in case No. 925/1421/20.

In the case under review, a company brought a claim seeking to recover immovable property from the unlawful possession of another and to recover rental arrears. The court of first instance dismissed the claim.

During the appellate review it was established that the claimant had underpaid the court fee when lodging the claim; the appeal, however, was returned because its deficiencies had not been remedied.

Three years after the judgment was delivered, one of the defendants filed an application for an additional judgment, requesting that the underpaid amount of the court fee be recovered from the claimant in favour of the State Budget of Ukraine.

The local commercial court, whose judgment the court of appeal upheld, granted the application and recovered the said amount of the court fee from the claimant.

The Joint Chamber of the Commercial Cassation Court of the Supreme Court disagreed with the judgment of the lower courts and noted that the provisions of the Commercial Procedure Code of Ukraine do not empower a court to recover an unpaid (underpaid) court fee after the dispute has been decided on the merits, including by means of an additional judgment, save in the cases expressly provided for by part 2 of Article 163 of the Commercial Procedure Code of Ukraine.

The Joint Chamber of the Commercial Cassation Court of the Supreme Court emphasised that, where a court has not detected an underpayment of the court fee before delivering judgment and has not made use of the procedural powers available to it, the claimant’s obligation to pay that fee is deemed to have ceased. In such a case, the court’s error cannot be shifted onto a party to the proceedings by means of an additional judgment delivered a long time after the judgment has become final.

The judicial chamber also observed that, in the absence of grounds for applying – or where it is impossible to apply – the procedural mechanisms for monitoring payment of the court fee laid down by the Commercial Procedure Code of Ukraine, the recovery by a court of first instance, through an additional judgment, of an unpaid (underpaid) court fee would demonstrate a breach of the principles of legal certainty and of the finality of a judgment that has become legally effective.

The destruction of the pledged property, rather than the purchaser’s good faith, is the ground for lifting an encumbrance – Civil Cassation Court of the Supreme Court

The destruction of pledged property is a lawful ground for terminating an encumbrance over immovable property and lifting the prohibition on its disposal. This is of key significance for the owners of homes destroyed as a result of hostilities, as it enables them to lift the encumbrance that must be removed in order to obtain State compensation.

This conclusion was reached by the Supreme Court, sitting as a panel of judges of the Second Judicial Chamber of the Civil Court of Cassation, in its judgment of 27 May 2026 in case No. 212/3248/25.

In the case under review, the claimant purchased a flat in the city of Bakhmut which, as later transpired, had already been the subject of a pledge since 1998 under the previous owner’s loan agreement.

In order to establish her entitlement to compensation for the destruction or damage of the flat, she applied to the State registrar but was refused on account of a registered encumbrance on the proprietary rights to the flat.

The claimant asked the court to lift the prohibition on disposal, relying on the fact that she was a bona fide purchaser and that the property had in fact been destroyed as a result of the russian federation’s aggression.

The courts of first and appellate instance allowed the claim, reasoning that the claimant was a bona fide purchaser of the flat, had no outstanding obligations towards the bank, and that the creditor had for a long time made no claims against the debtor or his heirs.

The Civil Cassation Court of the Supreme Court partially allowed the bank’s cassation appeal and explained that, under Article 24 of the Law of Ukraine “On Pledge”, a pledge remains in force where, on one of the grounds specified in the law, the property or property rights constituting the subject of the pledge pass into the ownership of another person.

A pledge also remains in force where, in the manner prescribed by law, the pledgee assigns the pledge-secured claim to another person, or the debtor transfers to another person the debt arising from the pledge-secured claim. Accordingly, a pledge remains effective where ownership of the pledged property passes to another person.

The cassation court observed that the lower courts had erroneously regarded the purchaser’s good faith as a sufficient ground for lifting the encumbrance, failing to take into account that the principal obligation under the loan remained unperformed.

At the same time, the Civil Cassation Court  of the Supreme Court emphasised that the courts had not addressed the arguments in the claim concerning the destruction of the pledged property and had not given them an appropriate legal assessment. The most important provision in this context is clause 2 of part 1 of Article 593 of the Civil Code of Ukraine, under which the right of pledge terminates upon loss of the pledged property, unless the pledgor has replaced it.

The Civil Cassation Court  of the Supreme Court concluded that, since the claimant had applied to the registrar precisely for the purpose of obtaining compensation for the destroyed or damaged property, the courts should have established the circumstances relating to the destruction of the pledged property, which, under Article 28 of the Law of Ukraine “On Pledge”, constitutes a ground for its termination.

Criminal Law Practice 

The Constitutional Court of Ukraine has upheld the constitutionality of setting bail more than the statutory limits and has emphasised the requirements for reasoning its amount.

By Decision No. 9-r(II)/2026 of 21 July 2026 (case No. 3-176/2025(355/25)), the Second Senate of the Constitutional Court of Ukraine declared paragraph five of part five of Article 182 of the Criminal Procedure Code of Ukraine to conform with the Constitution of Ukraine (constitutional). Under that provision, an investigating judge or the court may, in exceptional cases, set bail in an amount exceeding 80 or 300 subsistence minimum levels for employable persons, that is to say, in excess of UAH 266,240 for a grave offence and in excess of UAH 998,400 for a special grave offence (as at 2026).

The Constitutional Court observed that bail does not constitute a criminal punishment, a “ransom” paid for the person or compensation for the damage caused by a criminal offence. Its amount must be perceptible to the person concerned, yet not such as to render bail incapable, in practice, of serving as an alternative to keeping in custody. Bail, as an institution, constitutes a procedural guarantee of the presence of the person suspected or accused and of that person’s compliance with the other obligations imposed on him or her in the criminal proceedings.

At the same time, the Court emphasised the strict requirement that this provision be applied with due regard to the case-law of the European Court of Human Rights. The investigating judge or the court is obliged to give reasons substantiating the setting of bail beyond the statutory limits. 

To prevent bail from becoming a disguised means of keeping a person in custody, the investigating judge or the court must substantiate the person’s financial capacity, assess his or her lawful income and assets, take into account the existence of any dependants and have regard to the actual availability of the assets in the light of the attachment of property.

The initiative of law enforcement officers in conducting covert investigative (search) actions does not indicate provocation of a crime: a resolution of the Supreme Court.

By its resolution of 10 June 2026, the Criminal Cassation Court within the Supreme Court reversed the ruling of the Kyiv Court of Appeal in case No. 372/27/20 concerning the illegal sale of special technology for secret obtaining of information (Article 359 of the Criminal Code of Ukraine) and remitted the case for new consideration by the appellate court. In those proceedings, the court of appellate instance had set aside the judgment of conviction and closed the proceedings, having concluded that it was the officers of the Security Service of Ukraine, acting with the involvement of a person engaged in confidential cooperation, who had initiated the crime, and that the crime had been committed with their active assistance. The Supreme Court described that approach as “unjustifiably simplified”.

Provocation exists where the crime would not have been committed without the intervention of the law enforcement authorities, that is to say, where those authorities incited the person to commit the crime (for example, by making offers notwithstanding the person’s initial refusal, by persistent reminders and so forth) or where they artificially created a situation with a view to inducing the person to commit the crime.

By contrast, where the officers of a law enforcement authority merely join in unlawful activity rather than initiate it, influencing the course of events by means of covert investigatory (search) actions is to be regarded not as entrapment but as undercover work. Such conduct discloses no indication of abuse, having regard to the duty of the law enforcement authorities to counter crime.

The Court identified the following features as excluding entrapment:

• the absence of consistent and purposeful incitement to commit an offence;
• the existence of information as to independent prior preparation by the offender for the commission of the offence;
• the passive role of the law enforcement officers, who merely joined in recording and investigating the events at a certain stage of their development.

In such circumstances, the mere fact that an offer was made does not afford sufficient grounds for concluding that the approach made by a particular individual had a decisive influence on the formation of the criminal intent. Nor does it establish that the crime would not otherwise have been committed.

The Constitutional Court of Ukraine has defined the limits of the right to challenge rulings of the investigating judge under appellate procedure at the pre-trial investigation stage.

By Decision No. 6-r(II)/2026 of 15 July 2026, the Constitutional Court declared Article 309 of the Criminal Procedure Code of Ukraine to be in conformity with the Constitution of Ukraine (constitutional) in so far as that Article makes no provision for challenging, under appellate procedure, a ruling of the investigating judge setting a time limit for viewing the materials of the pre-trial investigation.

The Constitutional Court pointed out that a challenge under appellate procedure is one of the means of judicial control, but not the only one. The parties are entitled to lodge objections against such a ruling during preparatory proceedings in court. That right is matched by the court’s obligation to give due consideration to those objections and, where necessary, to take the measures required to restore the right infringed, by obliging the prosecution to grant access to the materials.

By contrast, Decision No. 8-r(II)/2026 of 21 July 2026 declared part 3 of Article 307 and parts 1 and 2 of Article 309 of the Criminal Procedure Code of Ukraine, which set out the list of rulings of the investigating judge that may be challenged under appellate procedure, and preclude any challenge to the remainder, to be inconsistent with the Constitution of Ukraine (unconstitutional). Those provisions were found to be unconstitutional in so far as they make no provision, during the pre-trial investigation, for the right to challenge under appellate procedure a ruling of the investigating judge refusing to grant a complaint against the omission of an investigator or public prosecutor. That omission consisted in the failure to return temporarily seized property.

The Court found this to constitute a legislative omission. A person’s ability to exercise the right to lodge objections against such a ruling of the investigating judge is contingent upon the completion of the pre-trial investigation and does not depend upon that person’s own decisions or actions. Throughout that period, however, the person is deprived of the powers to own, use and dispose of the property (in the complainant’s case, the pre-trial investigation has been ongoing for more than ten years).