Cabinet of Ministers approves decisions to launch Defence City: what does it mean? (updated)
The Cabinet of Ministers has approved the implementing regulations needed to launch the special Defence City legal regime.
This was announced by the head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, Danylo Hetmantsev (Servant of the People), on Telegram.
According to him, the government must next decide to launch the Defence City register and address the issue of arms exports for its residents.
"These documents are not ideal. But no new system is born without challenges. The main thing is that we have launched the necessary tool that provides a framework, order and accountability," Hetmantsev wrote.
Defense Minister Denys Shmyhal said the government’s decisions will allow Defence City to be launched from January 5, 2026.
According to him, to this end, the Cabinet of Ministers, upon the Defense Ministry’s submission, approved:
- the procedure for maintaining the Defence City register;
- a methodology for calculating the share of defense revenue (qualified revenue);
- the procedure for monitoring the use of profit exempt from taxation that directed to the development of operations;
- the procedure for obtaining resident status and the procedure for annual confirmation of compliance with the regime’s requirements;
- protection of data of defense industry companies within Defence City via an application to the Defense Ministry specifying which public registers or information the manufacturer seeks to restrict access to for security reasons;
- an algorithm for relocation and protection of production facilities;
- a mechanism for interaction between central and local authorities under the overall coordination of the Defense Ministry.
As reported, in early September, President Volodymyr Zelenskyy signed key laws introducing tax benefits for defense industry companies that will join the special Defence City legal regime.
Read more in the Business Censor article Defence City: Boost for defence industry or closed club for chosen few?
