“On December 17, the Cabinet of Ministers adopted a package of decisions to launch a special legal regime for the development of the Defense City defense ecosystem, which will come into effect on January 5, 2026. This was announced by Prime Minister Yulia Svyridenko. According to her, currently about half of the weapons for the Armed Forces are produced in Ukraine, and the state is working on further building up these capabilities. With this one”, — write on: ua.news
On December 17, the Cabinet of Ministers adopted a package of decisions to launch a special legal regime for the development of the Defense City defense ecosystem, which will come into effect on January 5, 2026.
This was announced by Prime Minister Yulia Svyridenko.
According to her, currently about half of the weapons for the Armed Forces are produced in Ukraine, and the state is working on further building up these capabilities. It is for this purpose that Defense City is introduced as a separate legal regime for supporting the defense industry.
The government, in particular, approved the procedure for acquiring Defense City resident status. The procedure for maintaining the register of residents, submission and consideration of applications for obtaining status, as well as the methodology for calculating the share of defense, or qualified, income, has been determined.
Control mechanisms have also been introduced. The procedure for checking the use of tax-exempt income, which should be directed to the development of activities, as well as the procedure for annual confirmation of residents’ compliance with the regime’s requirements, has been established.
Separately adopted decisions on the protection of sensitive information. Residents of Defense City will be able to apply to the Ministry of Defense to restrict access to certain public registers and information for security reasons.
In addition, the government approved the procedure for relocation and increasing the security of residents’ production facilities. The mechanisms of interaction between the central and local authorities, as well as the issues of financing, monitoring and reporting, have been determined. The regional military administrations have one month to determine those responsible for coordination, and the Ministry of Defense will carry out general coordination.
Funding of relevant measures is provided for in the state budget for 2026. Half of the personal income tax paid by Defense City residents will be credited to a special fund of the community budget and will be directed to the development of infrastructure, support for relocation or increased security of production facilities.
Yulia Svyridenko emphasized that the new regime creates clear conditions for development and protection for producers, and effective control and security tools for the state.
The Ministry of Defense plans to launch the special legal regime of Defense City as early as January 5, 2026. For this purpose, the agency submitted a package of regulatory acts to the government. The idea is simple – the state offers tax support to defense enterprises in exchange for the development of production and new technologies.
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