Financial sector news

A resolution has been adopted to provide partial compensation for the cost of property of business entities destroyed or damaged as a result of armed aggression by the Russian Federation, as well as partial compensation for insurance premiums under insurance contracts against military risks.

• The details of the government resolution were announced by the head of the Verkhovna Rada Tax Committee, Danylo Getmantsev.
• The draft budget allocates a total of UAH 1 billion for the program, which is set to start on January 1. According to Getmantsev, this is a drop in the ocean, given that, according to RDNA4 estimates, direct damage will reach $172 billion by January 1, 2025.
  
  
• Compensation will only be provided for property damaged or destroyed after the first day of the month following the date of entry into force of the aforementioned government resolution. Those who lost property earlier are not covered by this program.
  
  
• The maximum amount of compensation is UAH 10 million (but not more than the amount of direct (actual) damage).
  
  
• The collection of applications for compensation will cease when their volume exceeds the budgeted amount of UAH 1 billion. That is, if on the first day of the New Year, only 100 applications for compensation of UAH 10 million (or 200 applications for UAH 5 million) are received, the program will be put on hold.
  
  
• If an entrepreneur has previously received a microgrant from the state for the development of their own business, a “veteran grant,” received relocation assistance, or used a grant to create or develop processing industry enterprises, and their property has been destroyed, the amount of compensation will be reduced by the amount of funds previously received from the state.
• Those who had tax arrears on the first day of the relevant month at the time of application are not eligible to apply for compensation.
  
• Participation in the compensation program for damage/destruction of property is on a paid basis. For participation in the program, the business entity pays a contribution in the amount of 0.5% of the total amount of probable damage for damage/destruction of all property declared for participation in the compensation program for damage/destruction of property.