April news digest 2025

Corporate Law Practice

President signs EU-integration law overhauling Ukraine’s road transport rules

On 17 April 2025 the President of Ukraine signed Law No 4337-IX, which amends the Law on Motor Transport to bring Ukrainian legislation into line with EU requirements. The law was officially published on 19 April 2025.
The new act transposes the main provisions of Regulation (EC) No 1071/2009 and is designed to create a common transport area with the European Union. Once the rules take effect, Ukrainian carriers will be able to enter the EU single market on the same terms as operators from the member states, provided they meet the harmonised standards.

The law sets out three core conditions for licence-holders:

• Good repute – no serious breaches of the law or final court decisions against the operator.
• Financial standing – confirmed by a bank guarantee or insurance that covers the start-up and running of the business.
• Professional competence – the company must employ qualified transport managers.

These unified requirements apply to international freight and passenger services, domestic routes and the carriage of dangerous goods.
Most provisions will come into force one year after publication, giving operators time to adjust their processes and prove compliance. Certain procedural elements took effect immediately on the day of publication.
The government expects that clear, transparent criteria will improve safety, encourage competition and strengthen Ukraine’s position on European transport corridors.

Cabinet eases state-aid rules for major investment projects

On 21 April 2025 the Cabinet of Ministers of Ukraine revised the procedure for giving state support to projects with significant investments and removed a key hurdle that had been holding new initiatives back. From now on, businesses may invest in a project before submitting a state-aid application: the 18-month “cool-off” period between the first investment and the request for support has been scrapped.
Until now investors had to put plans on ice to keep their entitlement to incentives. Previous capital injections will no longer count towards the minimum threshold of €12 million in “significant investments”, allowing companies to start construction or modernisation while they prepare the paperwork. The change is meant to shorten project timelines and speed up economic recovery.

To qualify for state incentives (up to 30 per cent reimbursement of costs) an investor must sign an agreement with the government and complete the project within five years. Funds must go into priority sectors such as manufacturing, logistics, mining, healthcare, education, culture, tourism, sport, IT and related fields.

“This shows how government and business can create real conditions for economic growth. We need to boost production, attract investment into the real economy and support exports of high-value-added goods”, Deputy Economy Minister Vitalii Kyndrativ said, commenting on the decision.
Against the backdrop of post-war reconstruction, simpler rules for large investors send a strong message to both international and Ukrainian companies: the state is ready to adapt its laws flexibly to accelerate the flow of capital and develop strategic sectors of the economy.

Monthly UAH 150,000 cap on person-to-person card transfers has expired

From 1 April 2025 banks in Ukraine can once again process unlimited “card-to-card” transfers between private individuals. The six-month limit of ₴150,000 per month, set by National Bank of Ukraine (NBU) Resolution No 102 of 27 July 2024, applied from 1 October 2024 to 31 March 2025 and has not been renewed.
The cap covered the total amount a customer could send in hryvnia from all their accounts in one bank to the payment-card accounts of other individuals. It was introduced to curb capital flight and reduce schemes that might bypass currency controls during martial law.

Even while the rule was in force it did not apply to:

• transfers between a customer’s own accounts in the same bank;
• payments made using an IBAN;
• volunteer accounts that met special NBU criteria;
• individuals whose verified monthly income exceeded the threshold;
• transfers to corporate accounts.

Since the limit has now lapsed, these exemptions are no longer relevant.
The NBU stresses that other currency-control and payment restrictions adopted for financial stability remain in place. Banks are still expected to follow a risk-based approach and carry out proper checks on client transactions to prevent money-laundering and terrorist financing.

The Cabinet of Ministers introduced a new mechanism for protecting landowners and regulated the administrative procedure in the land sector

On 8 April 2025, the Cabinet of Ministers adopted Resolution No. 394 “Some Issues of Protection of Landowners’ Interests and Application of Administrative Procedure in the Field of Land Relations” prepared by the StateGeoCadastre; the document entered into force on 11 April 2025.
The Resolution opens up the possibility to submit free of charge to the State Land Management Documentation Fund materials developed and approved before 2013, even if they do not have a qualified electronic signature of a land surveyor. Such documentation can now be submitted not only by the persons named on the title page, but also by the owners (heirs, successors), users of real estate and authorities that transferred the land plot into ownership or use.

The new rules are expected to fill the state fund with ‘historical’ materials, simplify the determination of the boundaries of plots and help resolve disputes over their legal status.
For the period of martial law, the fund’s materials will be provided without the coordinates of turning points and will not be published on the website of the StateGeoCadastre for security reasons.
In addition, the resolution invalidated CMU Resolution No. 266 of 4 March 2004 (model agreement for a land management project), and brought a number of other acts in line with Laws No. 3993-IX and No. 4017-IX adopted in autumn 2024.

Tax Law Practice | Tax Alert

A new draft law on the taxation of virtual assets in Ukraine

On April 24, 2025, the Verkhovna Rada of Ukraine registered draft law No. 10225-d “On Amendments to the Tax Code of Ukraine and Certain Other Legislative Acts of Ukraine Regarding the Regulation of the Circulation of Virtual Assets in Ukraine”.

Inter alia, it suggests the following novelties regarding the taxation of transactions with virtual assets (the “VAs”), which are expected to be effective from January 01, 2026:

1. CIT payers will separately determine the total financial result from transactions with VAs, taking into account, in particular, the relevant tax adjustments to financial results in respect of such transactions.
   
   Thus, if, based on the results of the reporting period, a positive overall financial result from transactions on the sale or other alienation of the VAs (profit) is obtained, its amount will increase the financial result before taxation of the reporting period of the taxpayer.
   
2. The total annual taxable income of PIT payers will include the positive value of the total financial result from transactions with VAs (profit) based on the results of such reporting year.
   It is envisaged that PIT payers will keep records of the financial result from transactions with the VAs separately from other income and expenses.
   
   Profit from transactions with VAs will be subject to PIT at the rate of 18 % and military fee at the rate of 5 %.
   
   At the same time, the following types of income / value will not be subject to taxation and will not be included in the total annual taxable income:

• income from transactions on the exchange of VAs for other VAs;
• income received by the taxpayer during the reporting year from the sale or other alienation of VAs if the amount of such income does not exceed the amount of 1 minimum salary established by law as of January 1 of the reporting year;
• the value of VAs received as a result of their issue (creation) or free receipt by the taxpayer from their issuers or offerors and/or received by the taxpayer from the issuers or offerors of VAs solely in exchange for their personal data.
  It is also stipulated that the taxpayer’s income received in the year 2026 from the sale (alienation) in exchange for currency values of the VAs acquired before the entry into force of the above-mentioned law will be subject to PIT at the rate of 5 % (instead of 18 %).

3. The transactions listed below will not be considered subject to VAT:

• issue (emission), placement in any form of management, sale, exchange or other alienation of VAs, the redemption of VAs (except for certain transactions);
• provision of services related to the circulation of VAs rendered by the providers of the said services (with some exceptions).

4. The following persons will not be able to be single tax payers:

• of groups 1-3 – business entities (legal entities and individual entrepreneurs) that carry out transactions with VAs, as well as providers of services related to the circulation of VAs;
• of group 4 – business entities that carry out transactions with VAs.

5. Providers of services related to the circulation of VAs, rendering services in favor of residents of Ukraine (individuals and legal entities), will be obliged to:

• submit an application for registration with the tax authority within 60 days after the start of services provision to residents of Ukraine (except for those that provided such services before December 31, 2025, as they will be obliged to register by July 1, 2026);
• submit a report on transactions with the VAs to the tax authority by January 31 each year, the reporting period will be the previous calendar year.
  
  The draft law also provides for penalties for failure to submit an application for registration by a provider of services related to the circulation of VAs, as well as for failure to submit / late submission / submission with inaccurate data of a report on operations with VAs.
  
  At the same time, a transitional period is envisaged for the application of some of them – from January 1, 2026, to December 31, 2029, certain fines will be applied in a reduced amount.

International automatic exchange of information on income from digital platforms: a draft law is registered

On April 30, 2025, the Verkhovna Rada of Ukraine registered draft law No. 13232 “On Amendments to the Tax Code of Ukraine and Certain Other Legislative Acts of Ukraine on the Implementation of the International Automatic Exchange of Information on Income Received through Digital Platforms”.

Earlier, a version of this draft law had been published on the official website of the Ministry of Finance of Ukraine. We provided a general overview of it here.

It is worth noting that, in contrast to it, the currently registered version suggests that PIT on the income of an individual considered a reporting seller gained from carrying out reporting activities through digital platforms will be applicable at the rate of 5 %, inter alia, provided that:

• the annual income from carrying out the reporting activities does not exceed 834 times the minimum salary established as of January 1 of the reporting year (currently, it’s about UAH 6.7 million). In contrast, the initial version of the draft law suggested that the annual income from reporting activities for the application of the reduced rate should not exceed UAH 5 million;
• a person has a current account in a bank of Ukraine for payments in the course of reporting activities and notifies the reporting operator of the platform of its details. At the same time, if a reporting seller has made no more than three sales of goods through the platform during the reporting period (calendar year) for a total amount not exceeding the UAH equivalent of EUR 2,000 per calendar year at the official exchange rate of the National Bank of Ukraine as of January 1 of the reporting year, such person will have the right not to open a current account in a bank for reporting activities, but instead to use existing current accounts in a bank opened for their own needs. Such a person will be obliged to inform the reporting platform operator or qualified platform operator of the number (details) of such account. Whereas the initial version of the draft law required the existence of a current account in a Ukrainian bank for the purpose of making payments in the course of reporting activities (in all cases) as a mandatory condition for applying the reduced tax rate.

Also, the current version of the draft law stipulates that the tax agent of a reporting seller with respect to income from reporting activities may be not only the reporting operator of the digital platform, which will accrue and pay income to the individual, but also a qualified platform operator that will perform such actions in favor of the reporting seller (provided that the latter is a resident of Ukraine).

The list of taxpayers included in the “White Business Club” is updated

On April 18, 2025, the State Tax Service of Ukraine published an updated list of taxpayers with a high level of voluntary compliance with tax legislation as of March 2025.

More details on the peculiarities of tax administration envisaged for taxpayers for the period of their inclusion in the List we covered here.

According to the current version of the List, it includes 8,199 taxpayers.
It should be noted that the List is formed and approved by the STS of Ukraine on a quarterly basis, no later than the last business day of March, May, August, and November.

The Supreme Court on the status of the beneficial owner of income for the reduced rate of withholding tax

In its resolution dated April 17, 2025, in case No. 160/18691/23, the Supreme Court assessed whether Cypriot companies to which dividends were paid by a Ukrainian company were the beneficial recipients of such income and, consequently, whether there were grounds for the application of a reduced rate of withholding tax in Ukraine under the international agreement for the avoidance of double taxation. The issue of beneficial ownership emerged due to the fact that Cypriot companies further paid dividends to their non-resident founders.

In the course of the case, the Ukrainian company, in order to justify the legitimacy of their usage of the preferential rate, emphasized that the said Cypriot companies were the beneficial owners of the dividends since they had invested EUR 100,000 in the purchase of the company’s shares, had no restrictions on the further transfer of the income received to another non-resident and independently determined the further economic fate of such income.

Meanwhile, the tax authority maintained the position that these companies were only intermediate agents engaged in the transit of financial flows. Therefore, the application of the reduced tax rate on non-residents’ income was unlawful.

The courts of first instance and appeal concluded that the company’s claims should be sustained and the tax notification decision – canceled, inter alia, taking into account the fact that the period during which the funds received were at the disposal of the Cypriot companies was at least 6–12 months, i.e., a long time. In the courts’ view, this testified in favor of refuting the arguments about the transitory nature of the funds.

However, the Supreme Court found that such conclusions of the courts of previous instances were incorrect, since:

• no regulatory legal act of Ukraine or applicable international agreement on the avoidance of double taxation establishes such a criterion for determining the existence or absence of transitory movement of funds as the duration of the funds’ presence on the accounts of companies. Only the actual movement of funds is relevant;
• the factual circumstances of the case found out by the courts give grounds to conclude that the Cypriot companies to which the dividends were paid are not the beneficial recipients of income and the final recipients of funds, but are only intermediate agents that transited funds in the form of dividends.

Therefore, the Ukrainian company unreasonably applied a preferential tax rate on non-residents’ income.
This position, combined with other circumstances of the case and the Supreme Court’s conclusions, was the basis for canceling the decisions of the courts of previous instances and satisfying the cassation appeal of the tax authority.

Litigation Practice

Common mistakes in employee exemption from military mobilization

Over the past year, the procedure for exempting employees from military mobilization in Ukraine has changed multiple times, creating additional challenges for businesses. One of the major updates was the introduction of the exemption system through the “Diia” online portal. However, even after this new system was implemented, many companies continue to encounter difficulties.

A frequent issue is that the exemption service in Diia is not available even for companies officially recognized as critically important. This usually happens because the company has not yet been included in the Unified List of public authorities, state bodies, local governments, enterprises, and institutions authorized to apply for military service exemption for employees. To resolve this, the company must contact the authority that granted its critical status and request inclusion in the Unified List.

Another common mistake is attempting to exempt employees who do not meet the requirements set out in Procedure No. 76. If an employee does not qualify, the exemption will be denied. It’s also important to note that starting from December 2024, a new requirement was introduced: to be eligible for exemption, an employee must receive a monthly salary not less than 2.5 times the minimum wage in Ukraine (approximately UAH 20,000). If this condition is not met, the exemption will be revoked.

Employers also often face issues with incorrect data displayed in the Diia system. For example, it may still show employees who have already been dismissed or omit newly hired workers. This happens because the system pulls data from the Unified Register of conscripts and from the Pension Fund of Ukraine. To fix such errors, employers need to update the information through the Pension Fund’s electronic services portal, providing details about hiring, dismissal, reinstatement, or any changes in employment status.

Unjustified extension of the appeal deadline may lead to reversal of the ruling

When extending the deadline for filing an appeal, the appellate court must clearly explain why the delay was due to valid reasons. Simply stating that the reasons are “justified,” without specific arguments, is not enough and violates the right to a fair trial under Article 6 of the European Convention on Human Rights.

This position was expressed by the Commercial Cassation Court in case No. 908/2948/23 concerning an individual’s insolvency.

In that case, the court of first instance opened proceedings and initiated the debt restructuring procedure. The appellate court reversed the ruling, citing insufficient evidence of debt, and reinstated the appeal deadline without giving detailed reasons—merely agreeing with general statements about “valid reasons.”

The Supreme Court emphasized that reinstating the deadline without proper justification is, by itself, sufficient grounds to reverse both the ruling on opening appeal proceedings and the appellate court’s decision overall.

Divorce with a foreign citizen: where to file a claim?

In its ruling dated April 7, 2025, in case No. 757/10360/23-ц, the Supreme Court of Ukraine clarified where to file a claim for divorce between a Ukrainian citizen and a foreign national.

The claim may be filed at the place of registration or residence of the claimant if they have minor children in their care or are unable to travel to the place of residence of the other spouse for valid reasons. By mutual agreement, the case may also be considered at the place of residence of either party.

If the respondent’s place of residence is unknown or the respondent resides abroad, the claim may be filed at the location of their property or their last known address in Ukraine.

If both parties live outside Ukraine, the jurisdiction over the case is determined by the Supreme Court.

Law on protection of bona fide acquirers of property enters into force

On April 9, 2025, the Law of Ukraine No. 4292-IX “On Amendments to the Civil Code of Ukraine Regarding the Strengthening of Protection of Bona Fide Acquirers” came into force.

From now on, property cannot be reclaimed through court if more than 10 years have passed since the state registration of ownership.

However, this rule does not apply if, at the time the property was transferred out of state or municipal ownership, it belonged to:

• critical infrastructure facilities;
• state-owned assets of strategic importance to the economy or national security;
• defense-related land or property;
• objects or territories of the nature reserve fund (subject to supporting documentation);
• hydraulic structures (with proper documentation confirming the status);
• cultural heritage sites that were not subject to privatization.

If the court grants a claim for the recovery of property in favor of the state or a local community, it must also decide on compensation for the bona fide acquirer. For this, the state or local authority must first deposit the value of the property into the court’s deposit account.

These rules have retroactive effect: they apply to cases where, as of the date the law entered into force, no final court decision has been issued on property recovery, and also to property whose ownership was registered before that date.

Law on protection of rights based on ECHR judgments signed

On April 7, 2025, the President of Ukraine signed a law that allows court decisions to be reviewed based on judgments of the European Court of Human Rights (ECHR), even if more than ten years have passed.

The law amends the Commercial Procedure Code of Ukraine, and similar changes are planned for the Civil Procedure Code and the Code of Administrative Procedure of Ukraine.

Now, if the ECHR finds a violation of human rights, the time limit for reviewing a case in Ukraine can be reinstated, even after a long period.

Criminal Law Practice

The mechanism for ensuring the security of persons involved in criminal proceedings has been improved

On 16 April 2025, the Verkhovna Rada of Ukraine adopted a law that strengthens the protection of persons entitled to security in criminal proceedings, including witnesses, complainants, victims and convicts who cooperate with the investigation.

The main innovations include the following:

• in the decision to apply a preventive measure in the form of detention, the investigating judge is obliged to determine the pre-trial detention centre where the suspect will be held;
• setting a term for the application of security measures – from 1 month to 5 years (up to 2 months for convicted persons);
• establishing additional measures to ensure the safety of convicted persons;
• clarifying the procedure for transferring persons needing protection from pre-trial detention centres or penitentiary institutions to places with a special detention regime for up to 30 days.

The law is currently awaiting the signature of the President of Ukraine.

Pre-trial investigation in cases of disappearances under special circumstances: the draft law was adopted as a basis

On 29 April 2025, the Verkhovna Rada of Ukraine adopted as a basis a draft law that would optimise the pre-trial investigation of cases of disappearances in times of war, in particular in the temporarily occupied territories and areas of active hostilities.

In particular, under martial law, the prosecutor will have the right to determine by his/her reasoned decision the place of pre-trial investigation of criminal proceedings on murders, enforced disappearances and war crimes if they are related to the disappearance of persons under special circumstances, in particular in connection with an armed conflict, military operations or temporary occupation of a part of the territory of Ukraine.

In this case, the pre-trial investigation may be conducted at the place of residence (stay) of the applicant or the victim, who are close relatives and family members.

It is proposed that the prosecutor will retain these powers both during martial law and for the next 3 years after its termination or cancellation in Ukraine.