In Ukraine, taxes will increase starting December 1.

Will the new taxes be applied retroactively?

No, taxes will not be applied retroactively. The Parliament will soon adopt the necessary amendments to the Tax Code to ensure the updated regulations take effect starting December 1, particularly concerning sole proprietors (FOPs).

How will the military tax rate for individuals change?

The military tax rate for individuals will increase from 1.5% to 5%. This applies to the taxation of salaries, rental income, winnings, bank deposits, and similar income.

How will the military tax rate for sole proprietors (FOPs) change?

It depends on the FOP group:

FOPs in the first, second, and fourth groups will pay 10% of the minimum wage set at the beginning of 2025 (UAH 8,000). This means they will pay UAH 800 per month. The new taxes for this category will come into effect on January 1, 2025.

FOPs in the third group will pay a military tax of 1% of their turnover based on the results of the first quarter of 2025. For this group, the law will also take effect at the start of the new year.

Starting from January 1, 2025, the payment of the Unified Social Contribution (USC) by FOPs will become mandatory again. It had been voluntary since March 1, 2022.

Does the military tax apply to social benefits?

No, the military tax does not apply to social benefits. It also does not apply to pensions, scholarships, or other income not subject to personal income tax (PIT). Additionally, government bonds (OVDP) purchased by individuals are exempt from the military tax.

Corporate income tax:

For banks, the corporate income tax rate will increase to 50% starting in 2024.

For non-banking financial institutions (excluding insurance companies), the rate will rise to 25% starting in 2025.

USC:

The maximum base for calculating the Unified Social Contribution (USC) will increase from the current 15 minimum wages (UAH 26,400) to 20 minimum wages (UAH 35,200). This change will primarily affect high salaries up to UAH 160,000. Meanwhile, the abolition of the USC payment exemption will impact all entrepreneurs except those located in temporarily occupied territories.