The process of implementing important tax changes in Ukraine already started in 2024. The new year, however, brings several novelties that considerably affect the business environment in Ukraine. Below, we cover the main changes and amendments for specific tax areas and explain how they affect businesses and individuals in certain industries.           

Corporate Profit Tax

The CIT rate has been changed from 18% to 25% for financial institutions (except insurers).

For 2024, a higher CIT base rate of 50% instead of 25% has been set for banks (including taxation of advance payments of dividends).

Banks are prohibited from including tax losses from previous years to reduce the taxable base in 2024, with the right to do so starting from 2025 reporting periods until full repayment.

Advance payments for CIT and personal income tax have been introduced for taxpayers engaged in retail fuel trade.

The CIT exemption regime for aircraft manufacturing entities has been abolished.

Transfer Pricing

The lower threshold for ownership of corporate rights by each individual in the next legal entity in the chain for determining relatedness has been increased from 20% to 25%.

The penalty for failure to notify about participation in an international group of companies has doubled: 100 times the minimum wage (previously 50), amounting to 302,800 UAH in 2025.

The penalty for untimely submission of a notification about participation in an international group of companies has been reduced by half: one minimum wage (UAH 8000) per calendar day of delay, but no more than 50 times the minimum wage (previously 100).

The penalty for late declaration of controlled operations in the report (when submitting an amended report), is one minimum wage (UAH 8,000) for each day of delay. However, the total penalty cannot exceed 300 times the minimum wage or 0.5% of the value of the undeclared controlled transactions, whichever amount is smaller.

The penalties for failing to submit the report on controlled foreign companies during martial law have been adjusted. For violations starting from January 1, 2022, no penalties will apply as long as the controlling entity fulfills its reporting obligations within six months after martial law ends.

Personal Income Tax, Military tax and Social contributions

From January 1, 2025, tax agents are required to submit monthly reports on income accrued (paid) to individuals and the tax withheld, as well as the social contribution amount. Previously, the submission of such reports was on a quarterly basis.

For individual entrepreneurs, the military tax rate for the 1st, 2nd, and 4th groups will be 10% of the minimum wage. The third group will pay 1% of income determined according to the Tax Code.

For individual entrepreneurs who are not single taxpayers, the military tax rate will be 5% on taxable income from January 1, 2025.

The obligation to pay social contributions has been reinstated for individual entrepreneurs and those engaged in independent professional activities in 2025.

The upper threshold/base for social contributions calculation has been increased.

There are specific rules for individuals receiving income that is subject to annual declaration.

The annual military tax liability for taxable income in the 2024 reporting year, along with the final calculation of tax obligations, will be calculated at a military tax rate of 1.5%.

The military tax rate of 5% will apply to income reported in annual tax declarations from January 1, 2025.

Income from property transactions or the value of inherited or gifted property that is subject to taxation and received by the taxpayer after December 1, 2024, will be taxed at the military tax rate of 5%, regardless of whether such income is included in the annual tax declaration on property and income for the 2024 year.

VAT

The following exemptions from VAT taxation have been abolished from 2025:

• for the import of goods used in aircraft manufacturing
• for air transportation services for domestic passenger and baggage
• for the import of drones, scopes, binoculars, and portable radios

Land Tax

The exemption from land tax for aircraft manufacturing entities has been abolished for certain types of land.

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Anna Magdich

Managing Director | Accace Ukraine

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