On 28 November 2024, President Volodymyr Zelensky signed into law significant amendments to the Tax Code of Ukraine and other related laws with the aim of ensuring a balanced budget during the period of martial law. The law, passed by the Ukrainian parliament on 10 October 2024, came into effect on 1 December.
The key changes introduced by the law include:
- Military tax: For the duration of martial law, the military levy rate has been temporarily increased to 5% for a wide range of taxpayers, specifically employees and gig-contractors. For sole proprietors under the simplified tax system (3rd group), the military levy is introduced at 1% of gross income. The military levy for military personnel remains at 1.5%.
- Corporate income tax: The corporate income tax rate for non-banking financial institutions (excluding insurers) has been raised to 25% while banks will face a temporary increase to 50% for the year 2024.
- Advance payments: Monthly advance payments have been introduced for corporate income tax and personal income tax for those engaged in retail fuel sales.
- Tax administration: The law mandates monthly (instead of quarterly) reporting for personal income tax, military tax, and unified social tax.
- Tax relief for refugees: Ukrainians who fled the country due to the russian invasion and are receiving state support in other countries will be exempt from personal income tax and military levy in Ukraine for the financial assistance they receive from foreign governments.
- Resource rent: Changes have been made to the calculation mechanism for the value of extracted minerals for rent payment purposes, along with specific rent rates for certain minerals, including gas.
- Minimum tax liability for land: The minimum tax liability for land will be increased to UAH 700 (EUR 16) and UAH 1,400 (EUR 32) per hectare. The latter rate applies to land with at least 50% of arable lands.
These changes reflect Ukraine’s ongoing efforts to adapt its fiscal policies to the challenges posed by the current economic situation, russia’s ongoing military aggression against Ukraine and geopolitical uncertainties.
Source: Law on Amendments to the Tax Code of Ukraine on Peculiarities of Taxation during the Period of Martial Law, No. 4015-IX dated 10.10.2024 .
For more information on these amendments and tax law in Ukraine, contact your CMS client partner or these CMS experts: Ihor Olekhov, Maria Orlyk.
Social Media cookies collect information about you sharing information from our website via social media tools, or analytics to understand your browsing between social media tools or our Social Media campaigns and our own websites. We do this to optimise the mix of channels to provide you with our content. Details concerning the tools in use are in our Privacy Notice.