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Business Affected by War, t.meA destroyed office, a warehouse with goods, or production equipment – this 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 collect evidence correctly. This will determine the possibility of claiming 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 relief entrepreneurs can expect now.
Who Can Receive Compensation
Businesses of any legal form can claim compensation – both legal entities and individual entrepreneurs whose property has been damaged as a result of hostilities. However, unlike citizens (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 is Compensated
Compensation can apply to virtually any enterprise property that was on its balance sheet or owned by it and was destroyed, damaged, or stolen.Specifically, this includes:
- real estate – production facilities, offices, warehouses, shops, and structures;
- machinery and equipment – machine tools, conveyors, production lines, and special machinery;
- transport – corporate vehicles, trucks, and agricultural machinery;
- inventory – finished goods, raw materials, and semi-finished products;
- lost profits – damages due to the inability to conduct economic activities.
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What Documents Are Needed
To submit an application, you need to prepare a so-called “damages case.” This should include documents confirming ownership of the property and the fact of its damage.Specifically, you will need:
- title documents – extracts from the state property registers, sale or lease agreements, technical passports, enterprise balance sheet data;
- confirmation documents – State Emergency Service (SES) report on fire or shelling, as well as an extract from the Unified Register of Pre-trial Investigations (ERDR) on the opening of criminal proceedings;
- internal documents – order for inventory and inventory act of damaged or destroyed property;
- expert and appraisal documents – technical inspection report and official property appraisal 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 restoring damaged property or its market value on the date of destruction, if restoration is economically unfeasible.
- The second is lost profits, i.e., unrealized income. This is calculated based on the company’s financial performance in previous periods. The appraiser determines the income the company 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 (SES). Service representatives should address the consequences of the incident and draw up an appropriate report on the fire or destruction.You should also contact the National Police to have the information entered into the ERDR and to initiate criminal proceedings for a war crime.As experts note, these initial documents form the basis for further confirmation of damages resulting from military actions.At the same time, it is best not to delay documentation: over time, collecting evidence of damage can become more difficult.
What Benefits Can Be Expected
Businesses can not only document damages for future compensation but also take advantage of certain tax and financial relief measures right now.Read also
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Businesses are entitled to the following financial relief:
- VAT: write-off of destroyed goods or fixed assets due to force majeure circumstances without accruing “compensatory” VAT obligations.
- Property Tax: exemption from accrual and payment of tax on real estate other than land if the object is destroyed, damaged, or located in areas of active hostilities or temporary occupation (according to the list of the Ministry for Reintegration of Temporarily Occupied Territories).
- Environmental Tax: exemption from 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 the fact of property damage is properly documented).
Where Damages Are Recorded
At the international level, data on destroyed enterprise property is submitted to the International Register of Damages (Register of Damage for Ukraine).It is the first component of the future compensation mechanism. Recording damages in the register should form the basis for possible compensation 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’ll cover the most important events. To the point and without unnecessary details. 📨Specialists of the All-Ukrainian Public Organization “Association of Taxpayers of Ukraine” advise businesses not to delay the initial documentation of damages. Even if the enterprise currently lacks funds for a full assessment of damages, it is advisable to obtain documents from the SES and the National Police immediately.It is also recommended to create a secure electronic or cloud archive with photos, videos, scanned documents, and inventory acts, 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 VyshkovskaEditorBased on: Finance.ua# BusinessSpace for your advertisement “`