The Rada proposes to exempt ground robotic complexes for the army from VAT

Bill No. 15259 provides for a tax exemption for the supply of ground-based unmanned systems to the defense sector

The Verkhovna Rada has registered Bill No. 15259, which proposes to temporarily exempt from value-added tax the operation of supplying ground-based robotic complexes (GRCs) for the needs of the security and defense sector.

The initiators of the document explain that currently Ukrainian combat units are experiencing an acute shortage of ground-based unmanned systems, which are actively used at the front to perform combat, logistical and evacuation tasks.

What are ground-based robotic complexes used for

Ground robotic complexes play an important role in modern combat conditions.

Such systems are used for:

reconnaissance;
transportation of ammunition;
evacuation of the wounded;
performance of engineering works;
delivery of equipment to the combat zone.

The authors of the bill emphasize that expanding the use of NRCs allows reducing risks for military personnel and increasing the effectiveness of combat operations.

What exactly is proposed to be changed

The bill provides for amendments to subsection 2 of section XX “Transitional provisions” of the Tax Code of Ukraine.

It is proposed to establish that until the end or cancellation of martial law, operations for the supply of ground-based unmanned systems on the customs territory of Ukraine will be exempt from VAT.

The benefit will apply to equipment classified in commodity groups 84, 85, 87, 90 and 93 according to the UKT Foreign Economic Activity.

Who will be able to receive equipment without VAT

The tax exemption will be valid if:

the supply is carried out within the framework of state defense contracts;
the final recipient is the subjects of the security and defense sector.

Among them:

other military formations;
law enforcement agencies;
voluntary formations of territorial communities;
enterprises performing defense contracts.
The authors of the bill expect savings in budget funds

The initiators of the document believe that the abolition of VAT will reduce the final cost of NRC purchases for the state.

Thus, for the same budget funds it will be possible to purchase a larger amount of equipment for the front.

It is expected that this will help scale up the provision of combat units with ground-based unmanned systems.

What risks do they see in the bill

At the same time, the authors recognize that the introduction of the benefit may lead to a reduction in VAT revenues to the state budget.

Separately, the need to control that the tax exemption is applied exclusively to defense contracts and is not used outside the specified circle of recipients is emphasized.

Parliament also offers privileges for military personnel to import cars

In addition, earlier in the Verkhovna Rada, draft laws No. 15194 and No. 15195 were registered, which provide for the right of military personnel to import cars duty-free.

The initiatives concern mobilized military personnel and contract servicemen who serve after February 24, 2022.