I. Parliamentary Initiatives for Regulating Small and Medium Enterprises (SMEs) in Ukraine:

1.1 Draft Law on Amendments to the Code of Ukraine on Bankruptcy Procedures regarding the introduction of simplified procedures for micro and small enterprises (No. 15004 dated Feb 6, 2026)

The draft law proposes simplifying bankruptcy procedures for SMEs, specifically:

• Reducing the overall costs associated with bankruptcy proceedings.
• Making the involvement of an insolvency practitioner (arbitration manager) optional (to be engaged at the discretion of the debtor or creditor under contract).
• Eliminating the requirement to hold general meetings of creditors or form a creditors’ committee.
• Establishing shorter timeframes for simplified procedures and clear conditions for extending such deadlines.
• Developing standardized document templates for simplified bankruptcy procedures by the state bankruptcy authority.

1.2 Draft Law on Amendments to Subsection 8 of Section XX of the Tax Code of Ukraine regarding support for single-tax payers during economic downturns (No. 15010 dated Feb 6, 2026)

The draft law proposes a 0% single tax rate for the first two quarters of 2026 for Group 3 single-tax payers, regardless of VAT registration status. For other groups, the following tax liability features are proposed for the 2026 tax year:

1. Group 1: The rate is set by local councils at no more than 5% of the subsistence minimum.
2. Group 2: No more than 10% of the minimum wage.
3. Group 4: Tax rates are applied with a reduction coefficient of 0.5.

Effectively, all single-tax groups would be exempt from half of their “usual” annual tax liabilities. The Cabinet of Ministers is tasked with analyzing the efficiency of these temporary measures. By April 1, 2026, the Government must report on the results and may propose either canceling these benefits for Q2 2026 or extending/adjusting them based on the security and economic situation.

1.3 Draft Law on Amendments to Subsection 4 of Section XX of the Tax Code of Ukraine regarding support for enterprises whose production facilities were damaged or destroyed due to hostilities (No. 15011 dated Feb 6, 2026)

This bill aims at economic stabilization in the hardest-hit regions and strengthening energy independence by:

• Introducing a tax incentive mechanism allowing corporate income taxpayers to direct funds—otherwise destined for taxes—toward the repair and reconstruction of damaged fixed assets.
• Providing targeted support to enterprises in frontline regions where business risks remain highest.
• Prioritizing the restoration of critical infrastructure by extending tax preferences to electricity enterprises and residents of “Defense City.”
• Setting a limit on the use of the benefit (no more than 50% of profit) to support business without creating critical risks to the state budget.

1.4 Draft Law on Amendments to the Tax Code of Ukraine regarding the sustainability of tax legislation during martial law (No. 15012 dated Feb 6, 2026)

This bill aims to reduce tax pressure and strengthen business guarantees during the war and post-war recovery. Key provisions include:

• Establishing the presumption of innocence for taxpayers as a general principle within the Tax Code.
• Introducing safeguards against unjustified interference by regulatory authorities during audits. Unproportional or baseless interference is recognized as a tax offense committed by the regulatory body.
• Implementing automatic registration of tax invoices if no decision regarding a tax offense is made within 30 days of non-acceptance.
• Reversing specific tax hikes introduced by Law No. 4015-IX, including the advance corporate income tax payments for fuel retailers.
• Revising the taxation of state “cashback” assistance and restoring previous provisions regarding the military tax (war levy).
• Establishing a moratorium on changing tax elements and fees for the duration of martial law and one year after its conclusion.

II. Government Initiatives:

2.1 The Cabinet of Ministers of Ukraine plans to categorize territorial communities by type

The Government has defined key types of territories, including: recovery territories, territories with special development conditions (mountainous, forested, steppe, or man-made disaster zones), sustainable development territories, and regional growth poles.

Currently, 123 such communities have been identified across the Zhytomyr, Kyiv, Chernihiv, Sumy, Kharkiv, Dnipropetrovsk, Donetsk, Zaporizhzhia, Kherson, Mykolaiv, and Odesa regions.

“Recovery Territories” are defined as those meeting at least two of the following criteria:

• Active hostilities or temporary occupation (full or partial) took place.
• There is a risk of hostilities according to the official list.
• More than 20% of real estate has been damaged or destroyed in the last three years.
• Significant socio-economic decline and population displacement, where the number of IDPs exceeds 20% of the pre-war population.