Ukraine‘s President Signs Law Postponing Tax Hikes for SMEs and Entrepreneurs
President Volodymyr Zelensky has signed into law a bill that delays tax increases for small and medium-sized enterprises (SMEs) and freelancers (FOP), according to the official website. The law, which came into effect on December 1, initially raised the military tax rate from 1.5% to 5% on all Ukrainian citizens’ incomes.
Key Changes in the Law
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Postponement for FOP and Uplifted Taxpayers: The law initially required FOP and legal entities operating on the simplified tax system (third group) to pay the military tax. However, on December 4, the Ukrainian Parliament amended the law, pushing back the military tax payment for FOP to 2025.
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Military Tax Obligations: The law mandates that all taxpayers on the simplified tax system, including FOP of the third group and legal entities, pay a 1% military tax.
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Tax Increases for FOP: FOP paying the unified tax of the first, second, and fourth groups will now pay a military tax equivalent to 10% of the minimum wage (UAH 800 per month).
- Mandatory Monthly Reporting: Starting January 1, 2025, all tax agents must submit monthly reports on the unified social contribution (ESV), personal income tax (PIT), and military tax (MT).
The signing of this law is a significant development in Ukraine’s tax landscape, providing much-needed relief to SMEs and freelancers while ensuring the country’s fiscal sustainability.
