President Signs Law Amending Military Tax and Reporting Obligations for Ukrainian Businesses
In a significant development for Ukrainian businesses, a new law has been passed and signed by the president. The legislation, numbered 9319, introduces notable changes to military tax rates and reporting obligations for both individual entrepreneurs and legal entities operating on the simplified tax system.
The law, accessible on the Verkhovna Rada’s website, has been reported by 24 Канал, a leading Ukrainian news outlet. Here’s what you need to know about the key provisions:
Military Tax Reforms:
- Increased Military Tax Rate: The military tax rate for individuals’ income will increase significantly from 1.5% to 5%.
- Delayed Military Tax Payment for FLP: While initially planned for the fourth quarter of 2024, the payment of the military tax for freelancers (ФЛП) has been postponed to 2025. Those in the III group who are on the simplified tax system will have to pay a 1% military tax.
- Fixed Military Tax for Simplified System Users: For entrepreneurs and legal entities on the simplified tax system (I, II, and IV groups), a fixed military tax is introduced, amounting to 10% of the minimum wage per month (approximately 800 UAH).
New Reporting Obligations:
From January 1, 2025, a mandatory monthly reporting system will be introduced for tax agents regarding social security contributions, personal income tax, and military tax.
This law aims to bolster the country’s defense capabilities by increasing military tax contributions while streamlining reporting processes for businesses. As always, it’s crucial for entrepreneurs and business owners to stay informed about these changes and adapt their financial strategies accordingly.
