Military tax for individual entrepreneurs and increased rates – what does the new tax law entail?

As reported by “Judicial and Legal Newspaper”, the President of Ukraine Volodymyr Zelensky signed a law on November 28 that was passed by parliament in October, which amends the Tax Code to finance the Defense Forces and ensure financial stability (bill 11416-d). The law will come into effect on December 1.

The legislation includes several changes:

• Introduction of a military tax for individual entrepreneurs (FOP).
• Increase in the military tax rate for individuals.
• Starting in 2025, the corporate income tax rate for financial companies will rise to 25%.
• The income tax for banks for the year 2024 will be set at 50%.

These innovations aim to secure funding for defense expenditures, which are projected to reach 2.23 trillion hryvnias in 2025.

International aid to Ukraine is mainly directed towards non-military needs, while the country has to cover defense expenses on its own.

“Increasing taxes is a necessary step for the state in the third year of full-scale war. The obligation of citizens to pay taxes is a duty of the rear to the front,” the explanation to the law states.

As previously reported, taxes will increase starting in December, with no changes for November.