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Business Affected by War, t.meA destroyed office, a warehouse with goods, or production equipment does not mean that a business has lost its right to compensation. For entrepreneurs whose property has been damaged due to the war, it is important not only to document the fact of destruction but also to properly gather evidence. This will determine the possibility of claiming compensation for damages in the future.With reference to the “Association of Taxpayers of Ukraine,” we explain what business property may be eligible for compensation, what documents need to be collected, and what tax reliefs entrepreneurs can count on right now.
Who Can Receive Compensation
Businesses of any ownership form can claim compensation — both legal entities and individual entrepreneurs whose property has been damaged as a result of hostilities. However, unlike individuals (who receive housing payments through the “єВідновлення” program), the compensation mechanism for legal entities is more complex.The enterprise must:
- be officially registered in Ukraine,
- not have citizens or residents of the Russian Federation among its beneficiaries,
- and not be undergoing bankruptcy or liquidation proceedings.
All affected companies can submit an application to the International Register of Damages.Additional funds may be in your account today. Online loans. Many offers, you can compare terms. Catalog on Finance.ua.👛
What Exactly is Compensated
Compensation can apply to practically any business property that was on its balance sheet or belonged to it by right of ownership and was destroyed, damaged, or stolen.Specifically, this includes:
- real estate — production facilities, offices, warehouses, shops, and structures;
- machinery and equipment — machine tools, conveyor belts, production lines, and special machinery;
- transport — corporate cars, trucks, and agricultural machinery;
- inventory — finished products, raw materials, and semi-finished goods;
- lost profits — damages due to the inability to conduct business activities.
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What Documents Are Needed
To submit an application, you need to compile a so-called “damage case.” This should include documents confirming ownership of the property and the fact of its damage.Specifically, the following are required:
- title documents — extracts from state property registries, purchase or lease agreements, technical passports, enterprise balance sheet data;
- confirmation documents — State Emergency Service documents regarding fire or shelling, as well as an extract from the Unified Register of Pre-trial Investigations regarding the initiation of a criminal case;
- internal documents — an order to conduct an inventory and an inventory report of damaged or destroyed property;
- expert and appraisal documents — a technical inspection report and an official property valuation report;
- photos and videos of the destruction, preferably with geolocation and timestamp, as well as screenshots of media reports about shelling in the relevant location.
How Damage Amounts Are Determined
The amount of compensation is determined by two main indicators.
- The first is direct losses. This is the cost of repairing damaged property or its market value at the date of destruction if repair is not economically feasible.
- The second is lost profits, i.e., unrealized income. This is calculated based on the company’s financial performance in previous periods. An appraiser determines the income that the enterprise could have received if its property and production facilities had not been destroyed due to military actions.
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What to Do Immediately
The first step after property damage should be to call the State Emergency Service. Service representatives must address the consequences of the event and draw up a relevant report on the fire or destruction.You should also contact the National Police to have the information entered into the Unified Register of Pre-trial Investigations and to initiate a criminal case for a war crime.As experts note, these primary documents form the basis for further confirmation of damages as a consequence of military actions.At the same time, it is better not to delay with documentation: over time, gathering evidence of damage may become more difficult.
What Benefits Can Be Expected
Businesses can not only document damages for future compensation but also take advantage of specific tax and financial reliefs right now.Read also
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Businesses are entitled to the following financial reliefs:
- VAT: write-off of destroyed goods or fixed assets due to force majeure events without charging “compensatory” VAT obligations.
- Property Tax: exemption from charging and paying tax on real estate other than land if the property is destroyed, damaged, or located in areas of active hostilities or temporary occupation (according to the list from the Ministry of Reintegration).
- Environmental Tax: exemption from paying environmental tax applies to facilities located in areas of active hostilities or temporary occupation, as well as in case of complete or partial cessation of emissions and discharges due to enterprise destruction (provided that property damage is properly documented).
Where Damages Are Documented
At the international level, data on destroyed business property is submitted to the International Register of Damages (Register of Damage for Ukraine).It is the first component of the future compensation mechanism. Documenting damages in the register should form the basis for potential compensation payments to enterprises from frozen Russian Federation assets or special international funds.Want to stay updated on the main news of the day? Subscribe to our daily newsletter — we cover the most important events there. To the point and without unnecessary details. 📨Specialists of the All-Ukrainian Association of Taxpayers recommend that businesses not postpone the initial documentation of damage. Even if the enterprise does not yet have the funds for a full damage assessment, it is advisable to immediately obtain documents from the State Emergency Service and the National Police.It is also recommended to create a secure electronic or cloud archive with photos, videos, scanned documents, and inventory reports, and to store paper originals separately.Another step is to prepare documents for submission to the Register of Damages in advance and to verify whether the territory where the business is located is included in the official list of territories of active hostilities or occupation. This is necessary, in particular, for applying the provided tax benefits.
Svitlana VyshkovskaEditorAccording to: Finance.ua# BusinessSpace for your advertisement