Rada cancels duties and VAT on ATVs and drone components for Ukraine's defense needs

The Verkhovna Rada of Ukraine has adopted two bills — No. 15463-1 and No. 15464-1 — that significantly expand the list of tax and customs preferences for the needs of the country's security and defense forces. As reported by RBC-Ukraine, parliamentarians supported the documents, which provide for the cancellation of import duties and value-added tax on a number of critically important items: from tactical vehicles to components for unmanned systems. The decision takes effect after the president's signature and is aimed at simplifying the supply chains of military units amid the ongoing war.

What exactly falls under the tax preferences

According to the text of the adopted bills, one of the key decisions concerns all-terrain vehicles (ATVs) — multi-purpose tactical vehicles that in recent years have become one of the main means of mobility for reconnaissance and assault groups at the front. For this category of vehicles, the import duty, value-added tax, and, according to the publication "Delo," the excise fee are fully cancelled. The preferences also extend to a wide list of components and equipment needed for the production and operation of unmanned systems — from electronics to structural elements. Thus, parliament has effectively expanded the "white list" of imported vehicles and components that can be brought into Ukraine without paying duty and VAT.

Electronic warfare and defense production

The decision covers not only unmanned systems and tactical transport. Among the areas covered by the new preferences are electronic warfare means and components for defense production. This means that Ukrainian developer companies and military units engaged in countering enemy drones and reconnaissance will be able to obtain the necessary units and modules without additional customs and tax costs. Parliament expects that such changes will simplify and reduce the cost of supplying vehicles and components to Ukrainian military personnel, shortening procurement timelines and lowering the final cost of defense contracts.

ATVs in combat use: context

The practical significance of cancelling taxes on ATVs becomes evident when looking at the day-to-day work of security and defense force units. Tactical vehicles of the ATV type — including models similar to those used in field conditions (for example, the Sportman 875 or Big Boss 6×6) — provide mobility for small groups in rough terrain where wheeled and tracked vehicles are powerless. Soldiers on such vehicles carry out reconnaissance tasks, evacuation of the wounded, and delivery of ammunition and equipment to forward positions. Eliminating the customs barrier allows the vehicle fleet and spare parts to be replenished faster, which directly affects the operational readiness of units.

Broad tax context: simplification for sole proprietors and the IMF's position

The adoption of the defense preferences is taking place against the backdrop of more far-reaching changes in Ukraine's tax policy. The Cabinet of Ministers has already approved a bill on significantly simplifying VAT reporting for individual entrepreneurs (sole proprietors) and reducing the number of inspections by tax authorities. The document also provides for a reduction in the number of reporting periods per year. It is worth noting separately that the International Monetary Fund has agreed to postpone the deadlines for introducing VAT for sole proprietors: the law should take effect in January 2028 instead of the previously planned January 2027. The combination of these measures indicates an attempt by the authorities to balance the state's fiscal needs with the necessity of reducing the administrative burden on business and supporting the defense sector.

Significance for defense logistics

Experts note that expanding the list of goods exempt from duty and VAT is not a one-off measure but a systematic approach to building sustainable defense logistics. In a situation where a significant share of components for drones, electronic warfare means, and tactical vehicles is supplied from abroad, every percentage point of customs payments and tax levies is directly factored into the final cost of the product. Cancelling these levies allows both state customers and private defense vehicle manufacturers to optimize budgets and redirect the freed-up funds toward increasing procurement volumes and modernizing the fleet. In the long term, this may also stimulate domestic production, since the cheaper cost of imported components makes their use in Ukrainian assembly lines economically viable.