Tax Changes Effective from January 1, 2025

published: 09.01.2025

We remind you of the key changes provided for by the updated Tax Code from the beginning of the new year.

 

1) Military levy

Legal entities and individual entrepreneurs:

For individual entrepreneurs of the first, second and fourth groups, the levy rate will be 10% (800 UAH) per month of the minimum wage established at the beginning of 2025 (8,000 UAH).

For single tax payers of the third group (legal entities and individual entrepreneurs), the levy rate will be 1% of their turnover based on the results of the first quarter of 2025.

Individuals:

Total annual income for 2024 will be taxed with military levy at a rate of 1.5%.

Income from property transactions, income in the form of the value of inherited or gifted property – a rate of 5% from December 1, 2024.

Other income (income from salary, rent, winnings, deposits, etc.) is taxed at a 5% rate from December 1, 2024.

 

2) Personal income tax and single contribution paid by residents of Diia City

Income of a taxpayer – specialist resident of Diia City, paid in their favor by a resident of Diya City in the form of salary, remuneration under a gig contract, author’s award is taxed at a 5% rate.

A single contribution in the amount of the minimum insurance premium from the specified income is paid by a resident of Diia City starting from the calendar month following the calendar month in which the payer acquired the status of a resident of Diia City.

 

3) From January 1, 2025, amendments to the Tax Code on transfer pricing, introduced by Law No. 3813-IX, also came into force.

Criteria for the connection of legal entities and the formation of a list of states (territories) whose transactions with residents are recognized as controlled

states (territories) included in the list of offshore zones approved by the Cabinet of Ministers of Ukraine;

states (territories) included in the list of states (jurisdictions) that do not comply or improperly comply with the recommendations of international, intergovernmental organizations involved in the fight against the legalization (laundering) of proceeds from crime, or the financing of terrorism or the financing of the proliferation of weapons of mass destruction;

states (territories) whose competent authorities, based on the results of two consecutive reporting (tax) periods (years), do not ensure timely and complete exchange of tax and financial information (in particular, information on the ultimate beneficial owner) upon requests from the central executive body implementing state tax policy.

Criteria according to which transactions with non-residents are recognized as uncontrolled

a non-resident is a resident of a state (territory) with which Ukraine has concluded an international agreement on the avoidance of double taxation, which is confirmed by submitting to the central executive body implementing state tax policy by October 1 of the year following the reporting year,

a non-resident has a certificate in paper or electronic form in compliance with the requirements of the laws of Ukraine “On Electronic Documents and Electronic Document Management” and “On Electronic Identification and Electronic Trust Services”, which confirms that the non-resident is a resident of a country with which Ukraine has concluded a relevant international agreement (except for a state (territory) included in the list of states (territories) approved by the Cabinet of Ministers of Ukraine in accordance with subparagraph 39.2.1.2 of subparagraph 39.2.1 of paragraph 39.2 of Article 39 of the Tax Code), in accordance with paragraph 103.5 of Article 103 of the Tax Code.

Amended fines

1. Increased fine for non-submission of a notification of participation in an international group of companies: 100 times (before changes – 50) of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year.

2. Changed approach to determining the fine for untimely declaration of controlled transactions in the submitted report on controlled transactions in the case of submitting a clarifying report: one time subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year for each calendar day of untimely declaration of controlled transactions, but not more than the amount equal to one of the two values, whichever is smaller:

– 300 times the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year,

– 0.5 percent of the amount of controlled transactions not declared in the submitted report on controlled transactions.

3. Reduced fine in case of untimely submission of a notification on participation in an international group of companies: one amount of the subsistence minimum for an able-bodied person, established by law as of January 1 of the tax (reporting) year, for each calendar day of untimely submission of a notification on participation in an international group of companies, but not more than 50 amounts (before changes – 100) of the subsistence minimum for an able-bodied person, established by law as of January 1 of the tax (reporting) year.

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