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16 Sep. 2024

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Tax increase in Ukraine: Rada committee approves draft law for repeated first reading

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Tax increase in Ukraine: Rada committee approves draft law for repeated first reading

In July, the Verkhovna Rada of Ukraine sent back a draft law on changes to tax legislation for revision. Find out which categories of the population are expected to face tax increases and in what amounts

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On 18.07.2024, the Verkhovna Rada of Ukraine registered Draft Law No. 11416 “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Peculiarities of Taxation during the Period of Martial Law”. 

Currently, the relevant committee has recommended that the parliament adopt the revised draft law in the first reading. This was announced by MP Yaroslav Zheleznyak.

He also noted that several significant changes have been made to the text of the document, including a new tax increase on banks.

Main changes in the draft law

One of the main updates is the introduction of an increased military duty rate for a wide range of taxpayers. According to the proposals, the military duty is to be increased from 1.5% to 5% for most individuals.

In addition, an additional military fee of 1% of income is to be introduced for single tax payers of the third group.

For individual entrepreneurs (IEs) belonging to the I, II and IV groups of the single tax, a military tax rate of 10% of the minimum wage is introduced. This creates an additional tax burden on small and medium-sized businesses, but is aimed at supporting the military needs of the state.


Visit Ukraine has providedmore information for individual entrepreneurs on the specifics of their activities in 2024 in previous materials.



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At the moment, many Ukrainians are planning to start their own business. This is due to a large number of grants and opportunities. Read the article to learn how to do it quickly and in accordance with the law.

Taxes for banks and financial institutions

The previous version of the draft law provided for an increase in the corporate tax rate for banks to 50%, but this provision was removed. However, in the new version, it is being reintroduced for banks, but only for 2024. This increase could have a significant impact on the banking sector, creating new challenges for financial institutions.

For non-bank financial institutions, except for insurance companies, the document provides for the introduction of a 25% corporate income tax rate, which also changes their tax policy for the coming years.

The document also contains a provision concerning gas stations. It provides for improvements to the model for determining advance payments of corporate income tax, which is aimed at increasing transparency and efficiency of tax payments in this sector.

The draft law provides for changes in the timing of tax reporting. Instead of a quarterly tax period, a monthly period will be introduced for reporting on income paid to individuals. This will facilitate more prompt reporting, especially in the context of economic booking.

According to MP Yaroslav Zheleznyak, such tax changes could bring UAH 58 billion to the state budget in 2023, and UAH 137 billion is expected to be received in the next year, 2024.

Voting for the draft law in the first reading is expected in the coming days, and if passed, these changes will be an important step in increasing tax revenues to the budget, which is especially important in the context of war and economic challenges for the country.


Earlier, we told you that tax authorities will be able to access the accounts of Ukrainians abroad. Read more in the material.

For qualified legal assistance, please contact Visit Ukraine specialists. Upon request, you can get advice on tax and other areas of legislation.


Want to know more? Read the latest news and useful materials about Ukraine and the world in the News section.




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Frequantly

asked questions

To what extent will the military duty be increased under the new draft law amending tax legislation?

The revised draft law provides for an increase in the military tax rate from 1.5% to 5% and the establishment of a military tax for the first and second groups of individual entrepreneurs at 10% of the minimum wage.

What will be the income tax rate for banks in 2024, according to the new legislation?

When will the draft law on changes to tax legislation be reconsidered by the Verkhovna Rada?

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