Ukraine plans to incentivize the development of the defense industry.

Draft laws on Defence City are being registered in the Verkhovna Rada, creating a special legal regime for taxation and state support of defense-industrial complex enterprises, similar to the existing Diia.City model, said Danylo Hetmantsev, chairman of the Verkhovna Rada Committee on Finance.

It is proposed that the following benefits will apply to defense sector enterprises until January 1, 2036:

1. Exemption from taxes on profit on the condition of reinvestment
2. Exemption from land taxes
3. Exemption from real estate taxes
4. Exemption from environmental taxes

All tax benefits that are currently in place for the defense industry (such as VAT benefits, accelerated depreciation, and advantages for employees at relocated enterprises) will also be maintained. Companies included in Defence City will also be able to benefit from: simplified customs procedures, easier export controls for military technologies, additional protections during criminal proceedings, support for relocating enterprises, and the ability for the NBU to establish special features for currency supervision and transactions.