Tax laws Ukraine
Ukraine's taxation system has undergone significant changes in response to the ongoing conflict with Russia. To bolster defense funding, the government has introduced several tax increases and budget amendments.
Recent Tax Changes:
War Tax Increase: The personal income war tax rate has been raised from 1.5% to 5%. This measure aims to generate additional revenue for defense expenditures.
Corporate Tax Adjustments: Taxes on bank profits have been increased to 50%, while taxes on financial companies' profits have been set at 25%. These changes are part of efforts to secure approximately 140 billion hryvnias ($3.4 billion) in additional revenue for defense.
Budgetary Allocations:
- The 2024 budget has been amended to increase defense spending by 500 billion hryvnias ($12 billion), raising total expenditures to a record 3.73 trillion hryvnias ($90 billion). This funding is essential to meet the escalating demands of the conflict, including ammunition, weapons, and personnel costs.
Tax Administration:
- The State Fiscal Service, operating under the Ministry of Finance, oversees tax policy and administration in Ukraine. The Tax Code of Ukraine legally regulates taxation matters. The fiscal year aligns with the calendar year. Major sources of tax revenue include unified social security contributions, value-added tax, and individual income tax.
Additional Taxes:
Indirect Taxes: Value Added Tax (VAT) is levied at a standard rate of 20% on domestic supplies and imported goods, with a reduced rate of 7% for pharmaceuticals and healthcare products. Exported goods and services are zero-rated. citeturn0search9
Real Estate Tax: This comprises land fees, immovable property tax, and transport tax. Land tax rates range between 1% and 5% of land value, while immovable property tax can be up to 1.5% of the minimum wage per square meter. Transport tax applies to cars valued over 1.2 million hryvnias and used less than five years, with a fee of 25,000 hryvnias per car. citeturn0search9
Social Security Contributions:
- Employers are required to pay unified social security contributions (USSC) equivalent to 22% of each employee's gross salary, subject to an earnings cap. citeturn0search9
Conclusion:
Ukraine's tax system has been adjusted to meet the financial challenges posed by the ongoing conflict. These changes aim to ensure adequate funding for defense while maintaining essential public services. For the most current and detailed information, consulting official government sources or tax professionals is recommended.
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