On November 30, 2024, the President of Ukraine signed Law No. 4015-IX "On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Ensuring the Balance of Budget Revenues during the Period of Martial Law". The law came into force on December 1, 2024 and introduced significant changes to the tax burden for individuals and businesses.
Increase in military duty
One of the key innovations was the increase in the military duty rate from 1.5% to 5%.
This will affect:
- Salaries of employees - payroll deductions will increase.
- Financial transactions - the tax burden will increase when paying dividends, selling movable and immovable property.
At the same time, it is important to note that this increase does not apply to military personnel of the Armed Forces, the Security Service, the SZR, the Defence Intelligence of Ukraine, the National Guard, border guards, the SPS and the SSSP.
In our opinion, an increase in the military fee will increase the tax burden on most common transactions, including dividend payments, sales of movable and immovable property.
Tax Changes for Individual Entrepreneurs (IEs)
New military duty for IEs of groups I, II and IV
- The duty is set at 10% of the minimum wage set as of January 1 of the reporting year.
- There is currently a conflict, due to which the obligation to pay this fee arose already for October and November 2024. Lawmakers promise to fix this by postponing payment until January 1, 2025.
Military fee for group III sole proprietors
- The fee is set at 1% of income.
Increase of the military fee for private entrepreneurs on the general taxation system
- The rate increases from 1.5% to 5%.
Other tax innovations
- Monthly reporting - monthly combined reporting on personal income tax, military duty and single social contribution has been introduced instead of quarterly reporting.
- Income tax rate increase:
- For banks - up to 50%.
- For financial institutions (except insurers) - up to 25%.
How will the changes affect citizens and businesses?
- For citizens - a decrease in real income due to an increase in the tax burden, in particular when selling property.
- For businesses - employers are forced to revise their salary policy to keep employees motivated.
- For the markets - there may be a decline in activity in the real estate and car markets due to increased transaction costs.
Why is it important?
However, it creates an additional burden on citizens and businesses. To adapt to the new conditions, it is important to properly plan your tax policy and minimize risks.Consult Maira Consult
Our experts will help you:
- Understand all the changes in legislation.
- Optimize the taxation of your business.
- Minimize risks and effectively manage finances.
- Register an LLC in Ukraine and choose the right taxation system.
Leave a request for a consultation right now! Maira Consult is your reliable partner in matters of taxes and legal support.
