Compensation for War-Damaged Assets: Step-by-Step Strategy for Ukrainian Business (2026 Reality)

In the context of ongoing Russian aggression, Ukrainian businesses face not only the necessity of physical survival but also a legal battle for future reparations. As of early 2026, the compensation architecture has significantly changed: the International Register of Damage (RD4U) for legal entities has become operational, and national legislation has gained new instruments through the Export Credit Agency (ECA).

This article is a roadmap for business owners, directors, and lawyers that will help transform ruins into a legally documented asset (right to claim).

Stage 1. “Golden Hours”: Emergency Documentation (0-72 hours)

The biggest mistake businesses make is starting to clean up the premises before proper documentation. Your goal at this stage is to prove the causal relationship between the Russian attack and the destruction.

1. Emergency Services: Calling the State Emergency Service (DSNS) is mandatory. Obtain an Act on Fire or Act of Emergency Rescue Operations. The act must clearly state the cause: “as a result of ammunition impact,” “as a result of missile strike.” Avoid vague wording like “careless handling of fire.”
2. Police and SBU: File a crime report under Article 438 of the Criminal Code of Ukraine (“Violation of Laws and Customs of War”). Demand an extract from the Unified Register of Pre-trial Investigations (ЄРДР) and recognition of the legal entity as a victim. This establishes your status in criminal proceedings.
3. Own Photo/Video Documentation:
   • Use applications that overlay metadata on photos (GPS coordinates, date, time).
   • Shoot panoramically (reference to location) and in detail (equipment markings, missile fragments).
   • Make a video walkthrough of the territory with commentary.

Stage 2. Internal Bureaucracy and Inventory

This stage is critical for accounting and tax security. Without it, you risk paying taxes on destroyed property.

1. Order and Commission: The head issues an order to create an inventory commission due to force majeure circumstances.
2. Inventory: A mandatory inventory is conducted (if there is safe access to the facility) as of the 1st day of the month following the event. Inventory lists and reconciliation statements are prepared.
3. Inspection Act (Defect Act): The commission prepares a detailed act describing the nature of damage and concluding that assets are unfit for use.
4. Write-off Act (Form OZ-3): This is the final document for accounting, based on which assets are written off the balance sheet.

Stage 3. Tax Protection: How Not to Overpay

The state provides benefits, but they must be documented.

VAT (Value Added Tax)

According to clause 189.9 of the Tax Code of Ukraine, liquidation of fixed assets due to force majeure (war) is not subject to VAT and is not considered supply.

1. Condition: Availability of documents confirming destruction (Write-off Act OZ-3 + DSNS Act/Extract from ЄРДР).
2. Nuance: The Tax Service (DPS) often requires a Certificate from the Chamber of Commerce and Industry (CCI) on force majeure. Although court practice sometimes sides with taxpayers without the certificate, it’s better to obtain it to avoid disputes.

Property and Land Tax

Exemption from land payment and property tax is possible only if the property is entered in the State Register of Property Damaged and Destroyed as a Result of Hostilities (RPDM).

1. Action: Submit an information notice through the “Diia” portal or CNAP.
2. Local Authorities: Contact the local military administration (e.g., KMDA) for commission inspection. Only after entering data in the registers and a local council decision will tax accruals stop.

Stage 4. Damage Assessment: How Much Did You Lose?

Here paths diverge depending on your goal.

Path A: Only for Accounting Write-off

An internal commission and book value (residual value of assets) are sufficient. An expert is not required.

Path B: For Courts and International Register (RD4U)

A Report on Independent Damage Assessment from a certified valuation entity is required.

1. The assessment should include not only direct damages (replacement cost) but also lost profits (Loss of Profit).
2. Requirements of Methodology No. 326 and International Valuation Standards (IVS) are considered.

Stage 5. Obtaining Compensation: Map of Options 2026

Today there are three main mechanisms that can (and should) be used in parallel.

Option 1. International Register of Damage (RD4U) – The Hague

This is the main hope for full compensation (including lost profits) at the expense of frozen Russian assets.

1. Who submits: Legal entities.
2. Category: C3.1 “Damage, destruction or loss of assets”.
3. How to submit: Only through the “Diia” portal.
4. What to prepare: Proof of ownership, proof of event, cost assessment, financial statements (to prove lost profits).

Option 2. National Compensation Program (through ECA)

Since January 1, 2026, the mechanism has been operational according to Cabinet of Ministers Resolution No. 1541.

1. Essence: Partial compensation for the value of destroyed property for businesses in high-risk territories.
2. Condition: The event occurred after December 1, 2025. The business must become a program participant and pay a contribution (0.5% of the probable damage amount).
3. Limit: Up to 10 million UAH per entity.

Option 3. “eRecovery” Program

Although the program is focused on housing, in 2025-2026 it is expanding. Businesses should monitor opportunities to receive grants for recovery through “Diia” or partnership programs, which are often linked to the documentation mechanism in “eRecovery.”

Summary: Action Plan

1. Immediately: Call DSNS/Police, take hundreds of photos and videos with location reference.
2. Within a week: Conduct inventory, prepare defect acts, write off destroyed property (form OZ-3) to stop depreciation.
3. Within a month: Obtain DSNS Act, Extract from ЄРДР, order CCI Certificate (for tax purposes). Submit an application to RPDM to stop land/property tax accrual.
4. Strategically: Order professional damage assessment (including lost profits).
5. Final: Submit an application to the Register of Damage (RD4U) through “Diia” (Category C3.1) and consider submitting an application to ECA if your case meets the criteria of Resolution No. 1541.