News digest | May 2026

Corporate Law Practice

The Parliament of Ukraine has established a Temporary Special Commission on Investor Protection

The Parliament of Ukraine has established a Temporary Special Commission on Investor Protection. The relevant decision was adopted by a parliamentary resolution dated 26 May 2026. The Commission includes representatives of all parliamentary factions and groups.

The primary task of the newly established Commission is to prepare legislative initiatives aimed at strengthening investor protection, ensuring equal protection of the rights, interests, and property of investment entities regardless of their form of ownership, and promoting effective investment in the Ukrainian economy.

The Commission is also tasked with identifying priority areas for improving investment legislation, developing mechanisms for the protection of business rights, and preparing proposals to improve the investment environment.

Particular attention will be given to cooperation with business associations and specialised organisations. Such cooperation is intended to help identify practical issues faced by investors and to develop proposals aimed at creating more favourable conditions for attracting investment.

The Ministry of Economy presented support programmes for businesses affected by the war

The Ministry of Economy, Environment and Agriculture of Ukraine has presented state support instruments for enterprises that have suffered damage or have been forced to limit their activities as a result of the armed aggression.

One of the key instruments is grant support for manufacturing enterprises in the processing industry. Businesses may obtain funding to restore production facilities damaged or destroyed during the war, with the state covering a significant share of the relevant project costs. Particular attention is given to enterprises operating in regions most affected by hostilities.

A separate area of support concerns compensation for losses related to war risks. The programme provides for partial reimbursement of the value of damaged or destroyed property for businesses operating in high-risk regions, as well as compensation for insurance costs related to war-risk coverage.

In addition, the “Point of Support” programme is available for enterprises whose operations have been temporarily suspended due to shelling. The programme is aimed at preserving employment by compensating part of labour costs and social security contributions during periods of forced downtime.

To improve access to these initiatives, businesses may obtain consultations through the Export Credit Agency, the State Employment Service, and programme partner banks (Oschadbank and Ukreximbank). According to the Ministry, these instruments are intended to facilitate the restoration of production activities, preserve jobs, and support economic activity in regions most affected by the war.

The Parliament of Ukraine has adopted a new law on public procurement

On 27 May 2026, the Parliament of Ukraine passed the draft Law of Ukraine “On Public Procurement” in its second reading and as a whole, which provides for a comprehensive update of the legal framework governing the public procurement system. The document is one of the key European integration acts and is aimed at further aligning Ukrainian legislation with the law of the European Union.

The Law introduces modern approaches to the regulation of public procurement, considering European standards and Ukraine’s international obligations. Its provisions are intended to promote transparent and competitive procurement procedures and to improve the efficiency of the use of public funds.

One of the key changes is the shift from fixed hryvnia thresholds to euro-denominated ones. Competitive procedures become mandatory for goods and services from EUR 140,000, and for works – from EUR 5.4 million. The list of related parties in conflict-of-interest cases has also been expanded to include family members of authorised officials and heads of contracting authorities.

A significant innovation for businesses is the introduction of dynamic procurement systems: a supplier undergoes qualification once and participates in tenders for 4 years without repeated procedures. The localisation requirement now also applies to works and services where they involve the purchase of goods.

The legislative update is expected to play an important role both in the current functioning of the public sector and in the future reconstruction of the country. The new rules are designed to support more effective management of financial resources, increase accountability in the procurement sphere, and strengthen the confidence of international partners in the mechanisms governing the use of budgetary funds.

The Government has announced a tender for the construction of more than 1.3 GW of new generation capacity

By Resolution No. 488-r, the Cabinet of Ministers of Ukraine has launched the second stage of distributed generation development by announcing a tender for the construction of 1,322 MW of new dispatchable generation capacity. The initiative is aimed at strengthening the resilience of the power system and addressing the capacity deficit caused by continued attacks on energy infrastructure.

The new facilities are planned for regions with the greatest need for additional generation capacity. The largest share of capacity is allocated to the Sumy, Kharkiv and Poltava regions, as well as the Kyiv, Cherkasy, Dnipropetrovsk and Odesa regions.

The tender will be open to investors prepared to develop projects with a capacity of at least 10 MW. To encourage investment, the state is introducing a mechanism for guaranteed payment for the services of the new generation capacity for a period of five years following commissioning.

Applications will be accepted for three months, after which the practical implementation of the selected projects is expected to begin. The programme is intended to attract private investment into energy infrastructure and accelerate the deployment of new dispatchable capacity required for the stable operation of the power system.

The initiative forms part of the Government’s broader efforts to strengthen the country’s energy security by creating additional incentives for businesses to invest in new generation facilities and improve the reliability of electricity supply during wartime.

Tax Law Practice | Tax Alert

Ukraine and Germany are updating double taxation rules

On May 19, 2026, a new Agreement between Ukraine and the Federal Republic of Germany on the avoidance of double taxation and the prevention of tax evasion was signed in Paris.

The document is intended to modernize the existing treaty framework between the states in accordance with current OECD standards and international tax practices. Once it enters into force, the Agreement will replace the Convention that has been in effect between the countries since 1995.

A corresponding announcement was published on the official web portal of the Ministry of Finance of Ukraine. In particular, it outlines the following key changes introduced by the Agreement:

• dividends: the 5% rate remains in effect for companies holding at least 20% of the capital of a non-resident company; in other cases, the rate increases from 10% to 15%;
• interest: the rate increases from 2% to 5% for interest on bank loans and credit sales;
• royalties: the preferential zero rate for certain categories is abolished; a uniform tax rate of 5% is established.

In addition to changes in tax rates, the Agreement reportedly provides for:

strengthening mechanisms to combat the abuse of tax benefits;

• expanding the exchange of tax information between the competent authorities of the two states;
• improving procedures for resolving tax disputes and protecting taxpayers’ rights.

The text of the Agreement has not yet been made public.

A VAT exemption is proposed for the supply of ground-based robotic systems

On May 19, 2026, the Parliament of Ukraine registered draft law No. 15259 “On Amendments to the Tax Code of Ukraine Regarding the Exemption from Value-Added Tax of Transactions Involving the Supply of Ground-Based Robotic Systems.”

These changes will apply to ground-based unmanned systems classified under commodity groups 84, 85, 87, 90, and 93 of the Ukrainian Classification of Goods for Foreign Economic Activity (UKT ZED).

The draft law provides that the aforementioned exemption will apply subject to the simultaneous fulfillment of the following conditions:

• the supply is carried out under state contracts (agreements) for defense procurement;
• the end recipients of the products are the Ministry of Defense of Ukraine, the Armed Forces of Ukraine, law enforcement agencies, other military formations, volunteer formations of territorial communities, entities in the security and defense sector, or enterprises executing state defense contracts.

Confirmation of the intended use of the goods is also required through an end-user certificate or relevant contract terms.

The Supreme Court ruled on the timing of providing inventory records and source documents

In its ruling dated May 19, 2026, in Case No. 380/14185/24, the Supreme Court established its position regarding the conduct of on-site inspections of sole proprietorships and the provision of documents to tax authorities.

The Court concluded that if, during an on-site inspection, representatives of the State Tax Service request the inventory record form and source documents for goods, such documents must be provided immediately at the beginning of the inspection – in fact, on the first day and upon the first request of the tax authorities.

The Supreme Court noted that failure to provide documents at the start of the audit may be considered a violation and serve as grounds for imposing penalties.

At the same time, it was emphasized that the absence of the original documents at the point of sale does not automatically imply a lack of inventory records.

During the audit, the following may be submitted:

• copies of source documents;
• electronic documents or copies thereof.

If necessary, the originals may be submitted before the audit is completed.

In practice, this means that sole proprietors should ensure prompt access in advance to:

• inventory records;
• source documents for goods;
• electronic copies of documents.

After all, during an on-site audit, the speed of providing documents can be crucial for avoiding fines and additional assessments.

The State Tax Service has expressed its opinion regarding the form of reporting on the Unified Social Tax (UST) in the presence of legislative gaps

In its Individual Tax Consultation No. 2823/ITC/99-00-24-03-03 dated May 18, 2026, the State Tax Service expressed the position that despite the transition of sole proprietors and self-employed individuals to a quarterly reporting period for tax calculations, reports must be submitted using the current “monthly” form until the new reporting form is approved.

These conclusions pertain to amendments to the Tax Code that took effect on January 1, 2026.

As a reminder, Law No. 4536-IX established a quarterly base reporting period for sole proprietors and individuals engaged in independent professional activities to submit:

• tax calculations of individual income;
• amounts of withheld personal income tax;
• military levy;
• Unified Social Tax (UST).

At the same time, as of the date of filing reports for the first quarter of 2026, the Ministry of Finance of Ukraine had not yet approved the new quarterly Calculation form.

This has created a practical conflict, as the new regulations provided for a quarterly reporting period, while only the form for monthly reporting (F0500110) remains in effect.

The State Tax Service, citing para. 46.6 of the Tax Code of Ukraine, noted: until the new form is approved, the previously approved reporting forms remain in effect.

That is why tax agents—sole proprietors and self-employed individuals—must currently submit:

• a separate calculation for January 2026;
• a separate calculation for February 2026;
• a separate calculation for March 2026.

The Tax Service also reported that such reports are already being processed and uploaded to the State Tax Service’s information systems.

At the same time, the Individual Tax Ruling explicitly confirms that the new quarterly reporting form had not been officially approved as of the date of the consultation.

Litigation Practice

Law expanding the jurisdiction of international arbitration enters into force

On 21 May 2026, Law of Ukraine No. 4856-IX dated 28 April 2026 “On Amendments to Certain Laws of Ukraine Regarding the Expansion of the Jurisdiction of International Arbitration” (the “Law”) entered into force. The Law was adopted by the Verkhovna Rada on 28 April 2026, signed by the President on 19 May, and published in the “Golos Ukrainy” official gazette on 20 May.

The Law brings Ukrainian legislation closer to the standards of the UNCITRAL Model Law on International Commercial Arbitration and is aimed at transforming Ukraine into an arbitration-friendly jurisdiction, in particular for investment disputes.

The Law expands the scope of disputes that fall within the jurisdiction of international commercial arbitration: such arbitration may now hear disputes arising from contractual and other civil-law relations in the sphere of foreign trade and international economic activity, as well as disputes between enterprises with foreign investments, international organisations, and Ukrainian legal entities.

A separate novelty is the admission to arbitration of investment disputes involving the State: international commercial arbitration may now hear disputes between an investor and the State (its bodies and institutions) or an intergovernmental organisation in connection with investment activities carried out on the territory of Ukraine or another State. This is a key change, as previously such disputes were resolved in foreign arbitral forums; the Law, for the first time, permits them to be heard with the seat of arbitration in Ukraine.

The Law also recommends that the Cabinet of Ministers include the ICAC at the Ukrainian Chamber of Commerce and Industry among the dispute-resolution mechanisms in bilateral investment protection treaties. The procedures for the appointment and challenge of arbitrators have been updated: permanent arbitral institutions have been granted greater procedural autonomy, and decisions on these matters are not subject to judicial review.

The Law also broadens access to free legal aid for persons who have suffered sexual violence related to the armed aggression of the russian federation against Ukraine.

Overall, these changes open up the possibility for Ukraine to be not only a party to international investment disputes, but also the seat of their resolution. For foreign investors, this is a signal of the predictability of the Ukrainian legal order and its alignment with international standards, while for Ukrainian businesses, it is an additional instrument for protecting their interests.

Periods of deflation must be included in the calculation of inflation losses under Article 625 of the Civil Code of Ukraine – Civil Cassation Court within the Supreme Court

When calculating inflation losses under Article 625 of the Civil Code of Ukraine, all months of default must be taken into account, including periods of deflation (where the inflation index is below 100 per cent), as such calculations constitute a single continuous process. The limitation period for such claims was suspended and extended for the duration of the quarantine and martial law.

This conclusion was reached by the Second Judicial Chamber of the Civil Cassation Court within the Supreme Court in its judgment of 16 April 2026 in case No. 751/4086/24.

In this case, the claimant applied to the court seeking recovery of inflation losses and 3 per cent per annum for the period from May 2016 to September 2023. The claim was based on the defendant’s failure to comply with the obligation of a mortgagee to return the surplus of funds after acquiring title to the mortgaged property. The principal debt was actually repaid only in August – September 2023 in the course of enforcement proceedings.

The courts of previous instances granted the claim only for the period from the introduction of quarantine on 12 March 2020 until the discharge of the obligation in August – September 2023, citing the expiry of the limitation period in respect of accruals for the preceding years.

The Supreme Court disagreed with the conclusions of the lower courts and clarified the special regime governing the running of the limitation period: if the limitation period had not expired as of 2 April 2020 (the date of entry into force of Law of Ukraine No. 540-IX on the extension of time limits during the quarantine), then it was first extended until 30 June 2023 for the duration of the quarantine, and subsequently until 29 January 2024 for the duration of martial law. From 30 January 2024, the running of the limitation period was suspended for the duration of martial law.

Accordingly, the recovery of inflation losses and 3 per cent per annum without being limited to a three-year period is well-founded provided that the limitation period had not expired as of 2 April 2020.

The Supreme Court also emphasised that, under Article 625(2) of the Civil Code of Ukraine, inflation losses are calculated over the entire period of default as a single process, and accordingly deflationary months (with an index below 100 per cent) are not to be excluded from the calculation. Otherwise, the creditor would obtain an unwarranted advantage, while the debtor would bear an unjustifiably greater scope of liability.

In light of this, the refusal of the lower courts to grant recovery of inflation losses and 3 per cent per annum for the period from 2 April 2017 through 11 March 2020 inclusive was erroneous.

The Supreme Court also rejected the defendant’s reference to the favourable regime applicable during martial law in respect of 3 per cent per annum and inflation losses: paragraph 18 of the Final and Transitional Provisions of the Civil Code of Ukraine concerns exclusively borrowers under credit (loan) agreements. The debt in the present case arose from the mortgagee’s obligation to return the surplus value of the property; therefore, this concession does not apply to the defendant.

A judgment rendered against a deceased person without joining their legal successors is subject to mandatory reversal – Grand Chamber of the Supreme Court

In rendering a judgment against a deceased person, the court effectively resolves a dispute in the absence of a proper party – the defendant – who, at the time the judgment is rendered, no longer existed as a subject of law. This makes it impossible to give effect to the principle of adversarial proceedings and the right to be heard. The issue here is not a procedural breach, but a defect in the subject composition of the dispute itself, which precludes the rendering of a lawful and reasoned judgment.

This conclusion was reached by the Grand Chamber of the Supreme Court in its judgment of 13 May 2026 in case No. 367/8835/16.

In this case, the prosecutor filed a negatory action in the interests of the State, represented by the Cabinet of Ministers of Ukraine. The court of first instance granted the claim. The defendant’s heir appealed the judgment, pointing out that it had been rendered almost two years after the defendant’s death without the heir’s joinder as a legal successor; however, the court of appeal dismissed the appeal.

The Grand Chamber of the Supreme Court took the opposite view and emphasised that the parties to a case must be the parties to the disputed substantive legal relationship, on whom the binding force of the judgment is to extend. The proper defendant may only be a person against whom the claimant’s right can effectively be vindicated.

The Grand Chamber disagreed with the court of appeal, which had treated the death of a party as a ground for reversal only in conjunction with other grounds raised in the appeal. Such an approach effectively allows for the existence of a judgment rendered against a person who, at the relevant time, did not possess civil procedural legal personality. This contradicts the very nature of civil judicial proceedings, the requirement that a proper party participate, and the guarantees of a fair trial and the principle of adversarial proceedings.

The flaw in that approach lies in treating the death of a party as a procedural defect that requires additional substantiation of the unlawfulness of the judgment on the merits. In fact, in such circumstances there is no proper subject in respect of whom the court could have rendered any judgment at all.

The Grand Chamber of the Supreme Court concluded that the death of a party prior to the rendering of a judgment by the court of first instance constitutes a standalone and unconditional ground for reversal of that judgment, irrespective of any other circumstances of the case.

Ministry of Justice sets out the procedure for the moratorium on enforcement against the sole housing of military servicepersons

By Order No. 1337/5, the Ministry of Justice of Ukraine has approved amendments to the Instruction on the organisation of enforcement of judgments, which specify the work of State and private enforcement officers. These updates implement the provisions of Law of Ukraine No. 4833-IX of 7 April 2026 “On Amendments to сertain legislative acts of Ukraine regarding the improvement of the procedure for the enforcement of court judgments and decisions of other authorities, and the digitalisation of certain stages of enforcement proceedings”.

The new Section XXII of the Instruction sets out a clear procedure for the protection of such housing. In order to suspend enforcement, the debtor or their representative shall submit to the enforcement officer an application in paper or electronic form, together with a certificate confirming military service, issued no earlier than 10 days prior to the application and authenticated by an official stamp or a qualified electronic signature. No later than the following business day, the enforcement officer is obliged to suspend enforcement or the sale of the housing at auction. Should the debtor lose their status as a military serviceperson, they shall be required to notify the enforcement officer accordingly.

The protection extends to the debtor’s sole housing together with the land plot on which it is located. The enforcement officer is entitled to refuse to suspend enforcement if the debtor owns two or more residential real-estate properties (not counting those located in the temporarily occupied territories or in areas of hostilities).

The moratorium does not apply in cases concerning the enforcement against mortgaged property, nor in cases concerning compensation for damage caused by a criminal offence, bodily injury, or the death of a person.

In practical terms, this means that a military serviceperson may suspend enforcement proceedings concerning their sole housing without applying to the court: it is sufficient to submit an application to the enforcement officer along with a certificate confirming military service.