The Law of Ukraine on Tax Increases №4015-ІХ, adopted by the parliament and awaiting presidential signature, came into effect on November 30, 2024. Below are the key changes to the taxation system.
Taxation of individuals
Effective December 1, 2024:
- Military tax (MT): The rate on personal income (e.g., salaries, dividends, capital gains, interest, royalties, lease payments, etc.) increased from 1.5% to 5%. Salary or other income accrued to a person before the law’s effective date but paid afterward will be taxed at the previous rate of 1.5%.
- The MT rate for military personnel and law enforcement employees remains at 1.5%.
- Income exempt from the MT—such as government securities (including war bonds), social benefits, pensions, scholarships and other income not subject to personal income tax (PIT)—remains unchanged.
Effective January 1, 2025:
- Private Entrepreneurs (FOP): Depending on their tax category, entrepreneurs will either pay UAH 800 (approximately €16) or 1% of reportable turnover. Private entrepreneurs belonging to the third group of Single Tax will be required to pay 1% of their turnover based on the results of the first quarter of 2025.
These higher rates will remain in effect until the end of the year in which martial law is lifted.
Corporate income tax (CIT)
Effective January 1, 2025:
- The CIT rate for financial companies (excluding insurance companies) will increase to 25%.
- The CIT rate on banks for the 2024 fiscal year is set at 50%.
Advance CIT payments
Taxpayers engaged in retail fuel sales must make advance CIT payments of UAH 30,000, UAH 45,000, or UAH 60,000 per month, depending on the type of fuel station, for each point of sale.
- Advance payments reduce the corporate income tax liability calculated at the standard rate for the reporting period.
- Excess advance payments for the year cannot be carried forward to future periods, refunded or applied to other tax obligations.
Currency exchange operators must now make advance payments for each exchange location as follows:
- €700 for exchange locations in Kyiv
- €600 for locations in cities with populations over 50,000
- €200 for other locations
Land tax
Effective January 1, 2024, until the end of the year in which martial law is lifted:
- The minimum tax liability per hectare is set at UAH 700, or UAH 1,400 for land plots where arable land constitutes at least 50 percent of the total area.
- This provision does not apply to land located in areas included in the official list of territories where hostilities are ongoing (or have occurred) or areas temporarily occupied by Russian forces.
Tax administration
The law includes some amendments to reporting, tax return filing and administration procedures to align with the newly introduced tax changes.
By Valeria Tarasenko, Tax Consultant, Dentons
