Zelenskyy signs historic tax increase in Ukraine

President Volodymyr Zelenskyy has signed Law No. 11416-d on a historic tax increase.

Source: website of the Verkhovna Rada (Ukrainian parliament)

Details: Yaroslav Zhelezniak, Deputy Head of the Tax Committee, said the law would come into force on 30 November.

The tax increase includes the following changes, as previously reported:

• Increase in the military tax on salaries of individuals (including participants of the Diia.City programme for IT business) from 1.5% to 5% from the date the law comes into force. The exception is military personnel (1.5% will be retained).
• Increasing the military tax on other income (except salaries) from 1 January 2025 from 1.5% to 5%.
• Introduction of a military tax of 10% of the minimum wage (currently UAH 800 or roughly US$19.25) for sole proprietors of the first, second and fourth groups.
• Introduction of a military tax for sole proprietors of the third group in the amount of 1% of income.
• The corporate income tax rate for banks will increase from 25% to 50% in 2024. Since banks have already paid taxes at the previous rate for most of the year, the new rate will be applied retrospectively.
• Increase in the corporate income tax rate for non-bank financial institutions (except insurance companies) from 18% to 25% from 1 January 2025.

Background:

• Ukraine's Tax Committee supported the cancellation of the retroactive tax increase for sole proprietors in 2024.
• On 10 October 2024, the Ukrainian parliament passed the draft law No. 11416-d on tax increases.

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