Legislative Updates, Issue № 4 (2025-W51)

ADOPTED LAWS
According to the database of the Verkhovna Rada of Ukraine, no new laws were adopted last week.

REGISTERED DRAFT LAWS
No 6068-d dated 15 December 2025
Draft Law on Amendments to Certain Legislative Acts of Ukraine Regarding Protection Against
Unfair Trading Practices in Relations Between the Parties to Contracts for the Supply of
Agricultural and Food Products
Key points:
The draft law is aimed at implementing into Ukrainian legislation the approaches established at the level
of European Union law to counteract unfair trading practices in relations between suppliers and buyers of
agricultural and food products, in particular those set out in Directive (EU) 2019/633 of the European
Parliament and of the Council of 17 April 2019 on unfair trading practices in business-to-business
relationships in the agricultural and food supply chain.
Who should be concerned: all agricultural producers.
In practice, this draft law is intended to protect agricultural producers from retail chains, shopping centers
and other counterparties that typically have a stronger bargaining position and impose unfavorable and
unfair contractual terms on producers. As a result of such practices, a significant number of producers fail
to receive due income or bear substantial commercial risks, which in some cases may even lead to
bankruptcy.
No. 14301 dated 15 December 2025
Draft Law on Amendments to Article 1174 of the Civil Code of Ukraine Regarding the Establishment of
Conditions for Compensation of Non-Pecuniary (Moral) Damage Caused by Unlawful Prosecution or
Liability
Key points:
The draft law proposes amendments to Article 1174 of the Civil Code of Ukraine, providing that liability
of a state authority, an authority of the Autonomous Republic of Crimea, or a local self-government body
for actions or omissions of their officials or officers, in the form of compensation for damage, shall arise
subject to the existence of three mandatory conditions:

unlawful actions (or omissions) of the authority (or its officials or officers);
the occurrence of damage; and
a causal link between the unlawful actions and the damage incurred.
Who should be concerned: all businesses operating in Ukraine.
If adopted, the law would significantly strengthen the protection of businesses affected by unlawful
actions or decisions of state authorities and their officials. In particular, businesses would no longer be
required to prove the fault (guilt) of a specific official as a prerequisite for claiming compensation for
non-pecuniary (moral) damage. Currently, this burden of proof lies with the claimant, which in practice
often makes recovery of moral damages impossible.
No. 14270-1 dated 17 December 2025
Key points:
Draft Law on Amendments to Certain Laws of Ukraine Aimed at Strengthening Institutional Capacity in
the Field of Foreign Economic Activity and Ensuring Protection of National Producers
Overall, the draft law introduces a regulatory framework for the application of temporary trade restrictions
(import/export) in crisis situations, such as during wartime or in the event of a threat of shortages of
essential goods. Decisions on the introduction of such measures shall be adopted by the Cabinet of
Ministers of Ukraine upon submission by the Ministry of Economy.
The draft law also provides that the Ministry of Economy will coordinate the protection of Ukrainian
exporters in the course of foreign trade investigations and will be empowered to promptly implement
responsive measures, coordinated with international partners, against the aggressor state.
In addition, the draft law proposes to clarify the procedures and mechanisms for representation of
Ukrainian state authorities in international institutions, including international courts, for the purpose of
protecting the interests of Ukrainian producers.
Who should be concerned: importers and exporters.
Judicial Practice (Key Cases of the Week)
Resolution of the Supreme Court (Cassation Administrative Court)
Dated: 16 December 2025 Case No. 120/5273/24 Administrative proceedings No. K/990/34262/25
Outcome:
The provisions of tax legislation do not make the reliability of a taxpayer’s tax accounting data dependent
on compliance with tax discipline by its counterparties, provided that the taxpayer (purchaser) has incurred
actual expenses in connection with the acquisition of goods, works, or services intended for use in its
business activities.
Violations of tax legislation or business regulations by certain suppliers of goods, works, or services within
the supply chain cannot serve as grounds for concluding that the purchaser has violated statutory
requirements related to the recognition of expenses or the formation of a tax credit. Accordingly, the
taxpayer (purchaser of goods, works, or services) should not suffer adverse consequences, including the
loss of the right to recognize expenses or claim a tax credit, due to potential unlawful conduct of its
counterparty, unless the court establishes facts demonstrating that the taxpayer was aware of such conduct
and acted in concert with the counterparty.
Why it matters:
the Supreme Court has once again confirmed that a taxpayer cannot be held liable for its counterparties’
failure to properly comply with their tax obligations towards the state budget.
Resolution of the Grand Chamber of the Supreme Court
Dated: 3 December 2025 in case No. 902/388/18
Issue:
According to the facts of the case, a bank filed a claim against a mortgagor seeking foreclosure on the
mortgaged property to satisfy the borrower’s outstanding debt under loan agreements. The commercial
court opened proceedings and involved another company as a third party without independent claims
regarding the subject matter of the dispute, on the defendant’s side. By its resolution, upheld by the
cassation court, the appellate court satisfied the claim.
A financial company, as the legal successor of the bank, having discovered that during the consideration
of the case on the merits the defendant had alienated the mortgaged property and that such property had
consequently been transferred into the ownership of the company involved in the proceedings as a third
party, applied to the court with a motion to replace the defendant with its legal successor.
Outcome:
The Grand Chamber of the Supreme Court reached the following conclusion.
Where a person was involved in the case as a third party without independent claims and failed to notify
the court of the rights to the subject matter of the dispute acquired during the judicial proceedings, the
rights and obligations of the mortgage debtor are transferred to such person, which constitutes grounds
for replacing the debtor with that person in enforcement proceedings.
Why it matters:
The Supreme Court drew attention to the party’s bad-faith conduct in the case and ruled on its legal
consequences.
The Supreme Court is thoroughly studying and implementing the EU Regulation on cross-border
insolvency
This was discussed at an event dedicated to the main provisions and practical application of EU
Regulation 2015/848 on insolvency proceedings, as well as the presentation of its Ukrainian translation.
The event, organized by the Commercial Court of the Supreme Court in cooperation with the EU project
Justice Law, took place on December 11, 2025.
EU Regulation 2015/848 is part of a broader Eurointegration package being developed by the Ministry
of Justice of Ukraine. Cross-border insolvency has become particularly relevant in Ukraine today, as an
increasing number of business processes extend beyond a single jurisdiction. The interconnection of
economies requires effective mechanisms for legal interaction to protect the rights of creditors and
debtors and ensure transparency in insolvency procedures. Harmonization of legislation governing all
business relations represents a key direction in the development of Ukrainian law.
With the development of cross-border insolvency legislation, a specialized layer of professionals may
emerge among arbitration managers, trained specifically to be appointed in such proceedings.
Business & Market Legal Developments
The Ministry of Finance has published a draft law introducing value-added tax (VAT) for individual
entrepreneurs (FOPs) starting in 2027.
Member of Parliament Yaroslav Zheleznyak reported that the draft law proposes to establish, from January
1, 2027, the obligation for FOPs to register as VAT payers if the total annual turnover from the supply of
goods or services exceeds UAH 1 million.
The MP noted that by January 15, 2026, the government will submit the draft law to Parliament for
consideration (fulfilling an IMF prior action) and will push for the law to be adopted by the end of March
2026 (which will serve as an IMF benchmark).
We will continue to monitor the situation.
The State Tax Service Simplifies Procedures for Doing Business
Acting Head of the State Tax Service, Lesya Karnaukh, reported that in 2025 the number of high-risk
taxpayers was nearly halved, and the number of blocked tax invoices decreased almost fourfold. For
example, at the beginning of 2025, the share of blocked tax invoices was 0.74%, while by December
2025 it had fallen to 0.21%. The high-risk status was assigned to 24,900 companies at the start of 2025,
compared to 12,700 companies by December 2025.
For years, the blocking of tax invoices topped the list of business complaints, as it stopped the flow of
approximately 20% of company funds (the VAT component in the value of goods and services). It also
often led to a halt in incoming payments, because many contracts in Ukraine include clauses that allow
buyers or customers to suspend all payments if a tax invoice is blocked by the tax authority.
Today, the situation is improving thanks to a series of measures implemented by the Tax Service,
including:

Establishment of consultation centers and “hotlines” in regional offices to address issues related
to the blocking of tax invoice registration and taxpayer risk status.
Opening of Tax Advisory Offices to provide guidance on any tax-related matters.
Updated approaches to the operation of commissions within regional Tax Service offices.
Ukrainian Parliament Advocates Retaining Only 5% of Strategic Enterprises in State Ownership
In the Ukrainian Parliament, it is believed that only 5% of strategic enterprises should remain in state
ownership.
This opinion was expressed by Danylo Hetmantsev, Chair of the Verkhovna Rada Committee on
Finance, noting that currently over 60% of state-owned enterprises are inactive, and around 10% do not
submit any reports on their activities. According to his data, as of January 1 this year, the state controlled
2,916 business entities, including 2,571 state-owned enterprises and 345 companies with a state share
exceeding 50%.
“Of these, 1,815 business entities (62.2%) did not operate last year (1,623 state-owned enterprises and
192 companies). This is not entirely due to the full-scale war — a similar trend existed even before its
outbreak,” Hetmantsev noted.
Moreover, 533 operating entities reported combined losses of nearly ₴2 billion last year.
“Analyzing the efficiency of the state sector of the economy, I believe the state should divest from all
non-strategic assets and property, retaining only a very limited circle of strategically important
companies in its ownership,” Hetmantsev concluded.
State Tax Service of Ukraine and Polish National Tax Administration Sign Memorandum of
Cooperation
The State Tax Service of Ukraine and the National Tax Administration of Poland have signed a
Memorandum of Cooperation, outlining strategic areas of collaboration:
EU integration processes and adaptation to EU standards: The tax sector is a key and sensitive
part of Ukraine’s EU accession negotiations. Ukrainian authorities highly value the experience of
European institutions, while taking into account local realities.
Combatting the shadow economy: Enhancing analytical tools to reduce illegal circulation of
goods and tax evasion.
Improving digital services for taxpayers: Exchange of best practices on e-services and process
automation, making tax administration more convenient and understandable for both individuals
and businesses.
Deepening the exchange of tax information under international standards: This will enable faster
detection of high-risk operations and control over cross-border schemes, fully standardized and
without unnecessary barriers.
Enhancing professional qualifications: Joint training programs and practice exchange between
experts, including involvement of the National School of Public Administration of Poland.
Strengthening institutional capacity of tax administrations in both countries.
Germany to Launch Investment Fund for Ukraine, Supporting Labor Market Reform and
German Companies’ Activities
Germany plans to launch a fund for investments in Ukraine and has initiated mechanisms to
support labor market reforms and the operations of German companies in the country.
Chancellor Friedrich Merz stated at a business forum in Berlin that partners are working on
various formats to make investing in Ukraine attractive despite challenging conditions. In
particular, next year Germany, together with European partners, intends to launch a European
flagship fund for Ukraine’s reconstruction, aimed at attracting large-scale investments with the
participation of private investors.
At the same forum, German Minister of Economy Katharina Reiche presented a new financial
instrument called Ukraine Connect, designed to support Ukraine’s reconstruction. Ukrainian
Minister of Economy Oleksiy Sobolev noted:
“The Ukraine Connect instrument, implemented through relevant European institutions, is
precisely the mechanism to provide additional capital to German companies seeking to operate
in Ukraine. It will allow them to expand their presence, make investments, and also help the
Ukrainian government implement investment programs more effectively. This means we can
work together to provide investment incentives to German companies that are already expanding
their operations in Ukraine.”