Posted on 22 Sep 2026
Despite the most difficult conditions and constant shelling, Ukraine’s iron and steel enterprises continue to operate during the war. However, under such circumstances, the state is delaying VAT refunds to certain enterprises in the sector, in particular due to technical constraints in the implementation of sanctions policy. At the same time, any delay in VAT refunds deprives companies of working capital and worsens their economic situation to a critical level.
This statement was made by the president of the Ukrmetallurgprom Association, Oleksandr Kalenkov, whilst commenting on recent instances where the state had failed to refund VAT to iron and steelc companies on formal grounds.
Among other things, the state authorities are withholding 357.9 million UAH in budgetary VAT refunds due to the Kryvyi Rih-based private joint-stock company Sukha Balka. The official reason given was that the full name of a former shareholder matched that of a person on the sanctions list. The State Tax Service has verified and approved the claimed amounts, but the funds have not yet been paid to the company.
“Failure to receive a VAT refund means that a company does not, in effect, get its own funds back, which increases its need for working capital. However, in a wartime situation, when securing external funding is difficult, this burden may lead to a reduction in production volumes compared with what might otherwise be possible,” said Oleksandr Kalenkov.
Ukrmetallurgprom has previously raised the issue of the failure to refund VAT to companies in the sector. Unfortunately, this has been happening systematically every year for more than a decade, particularly for companies that mine, process and export iron ore.
As for the current situation, the president of the Ukrmetallurgprom Association comments: ‘The state should have turned its attention to this problem much earlier. In early September, at a meeting chaired by Prime Minister Serhiy Koretskyi on the state of affairs in the iron and steel sector, this issue was also discussed. Following the meeting, the Prime Minister instructed officials to examine the appropriateness of this regulation. To resolve the issue of non-reimbursement of VAT, there is no need to carry out any structural reforms in the sector, take complex measures or radically amend the legislation.”
He emphasises that the freezing of these funds not only limits Sukha Balka ability to purchase the necessary materials and equipment, but also its ability to carry out essential repairs.
The situation regarding VAT refunds in Ukraine remains tense — the outstanding VAT balance remains at a consistently high level and is even rising. Since January 2026, it has increased by 4.9 billion UAH, reaching 34.3 billion UAH as of early September. According to experts, the funds for refunds are available, but the mechanism, unfortunately, remains opaque and dependent on many subjective factors.
Note:
As of September 2026, PJSC Sukha Balka (part of the DCH Steel Group) had not received nearly 358 million UAH in VAT refunds — a sum comparable to all its tax payments for 2025. The reason for the hold was that the full name of a former minority shareholder (who owned 0.000023% of shares, valued at 10 UAH) matched that of a person on the sanctions list. However, the identity of the two individuals has not been proven in court, and the shareholder in question lost their stake back in November 2025 as part of a compulsory buy-out. Despite confirmation of the debt by the State Tax Service of Ukraine and appeals to the Ministry of Finance and the Treasury, the issue remains unresolved. This puts the company at risk of having to cease operations, and also creates the risk of delays in the payment of wages and utility bills.
Source:GMK Center
