Main tax changes as of January 01, 2026

Taxation of banks

On December 26, 2025, the Law of Ukraine dated December 03, 2025, No. 4698-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding the Specifics of Taxation of Banks’ Profits with Corporate Income Tax in 2026 and Postponement of the Implementation Dates of the Electronic System for the Circulation of Alcoholic Beverages, Tobacco Products, and Liquids Used in Electronic Cigarettes” (hereinafter – the “Law”) has entered into force, with the exception of provisions that came into force on January 01, 2026.

The Law, inter alia, provides that, for the tax (reporting) period of year 2026, the base rate of corporate income tax for the taxation of banks’ profits, as well as for the payment of corporate income tax liabilities when paying dividends, will be 50 %.

At the same time, in 2026, banks will not be able to reduce their financial result before taxation by the negative value of the taxable object from previous tax (reporting) years. 

Currently, the Law establishes that the unaccounted negative value from previous years will reduce the financial result before taxation of future tax (reporting) periods starting from January 01, 2027.

Changes concerning excise tax payers

Starting from January 01, 2026, the rates for the following will increase:

• excise tax on tobacco products, tobacco, and manufactured tobacco substitutes, other products containing tobacco, tobacco substitutes;
• minimum excise tax liability on tobacco products;
• excise tax on fuel for vehicles and equipment, light, medium, heavy distillates, gasolines, kerosene, etc.

Such changes are provided for by the Law of Ukraine dated December 04, 2024, No. 4115-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding the Revision of Excise Tax Rates on Tobacco Products” and the Law of Ukraine dated July 07, 2024, No. 3878-IX “On Amendments to the Tax Code of Ukraine Regarding the Implementation of Provisions of European Union Legal Acts Regarding Excise Tax”.

In addition, taking into account the provisions of the Law, the enactment of the Law of Ukraine dated June 29, 2023, No. 3173-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine in Connection with the Introduction of Electronic Traceability of the Circulation of Alcoholic Beverages, Tobacco Products, and Liquids Used in Electronic Cigarettes” has been postponed from January 01, 2026 to November 01, 2026.

Consequently, the application of electronic excise tax stamps for alcoholic beverages, tobacco products, and liquids used in electronic cigarettes, and the Electronic system for the circulation of the said goods, will become mandatory only from November 01, 2026. 

At the same time, goods marked with paper excise tax stamps, produced in Ukraine or imported into its territory before November 01, 2026, may remain in circulation for no more than 18 months from this date, i.e., until May 01, 2028.

Validity of VAT, single social contribution, and land tax exemptions

1. VAT

• The Law has extended the application of certain VAT exemptions, the validity of which was due to expire on January 01, 2026. In particular, the following exemptions have been extended:

• until January 01, 2029 – VAT exemption on the importation into Ukraine of generators, batteries, inverters, and other goods specified in clause 9-36 of Section XXI of the Customs Code of Ukraine;
• until January 01, 2029 – VAT exemption on the importation into Ukraine of generators, batteries, engines, spare parts for them, and other goods within the framework of agreements financed by the Energy Community Secretariat;
• until January 01, 2027 – VAT exemption on the importation into Ukraine of drones, thermal imagers, and other goods specified in clause 9-24 of Section XXI of the Customs Code of Ukraine. 

We note that, taking into account the provisions of the Law of Ukraine dated December 04, 2025, No.  4710-IX “On Amendments to the Customs Code of Ukraine Regarding the Improvement of the Procedure for Levying Customs Payments and Performing Certain Customs Formalities Regarding Goods Imported into the Customs Territory of Ukraine for Security and Defense Needs”, the importation of the aforementioned goods during the respective period shall also be exempt from the payment of import duty.

• From January 01, 2026, VAT exemption on the importation into Ukraine and supply within the customs territory of Ukraine of vehicles equipped with electric motors (electric cars), as well as new vehicles equipped with internal combustion engines running on compressed/liquefied natural gas, methane, or biogas, shall expire.

2. Single social contribution 

The Law of Ukraine dated December 03, 2025, No. 4695-IX “On the State Budget of Ukraine for 2026” has suspended for year 2026 the validity of the provision which, for the period from March 01, 2022, until the termination or cancellation of martial law in Ukraine and for 12 months after its termination or cancellation, provided the right not to accrue, calculate, or pay single social contribution for themselves for the following persons:

• individual entrepreneurs, including those who have chosen the simplified taxation system (except for electronic residents (e-residents);
• persons engaged in independent professional activities;
• members of a farming enterprise, unless they are subject to insurance on other grounds. 

3. Land tax

From January 01, 2026, shall cease to apply the provision according to which land tax for land plots on which objects of residential and/or non-residential real estate are located, destroyed as a result of hostilities caused by the armed aggression of the russian federation, was temporarily not accrued and not paid for the period from the first day of the month in which the date of destruction falls until the last day of the month in which the property right to the newly built real estate object on such land plot is registered.

Application of the simplified taxation system

• Starting from January 01, 2026, the Law has established a prohibition for business entities (legal entities and individual entrepreneurs) engaged in security activities to be payers of the single tax for groups 1-3. 

Taking into account the clarifications of the tax authority, single tax payers engaged in such activities are recommended to submit an application for withdrawal from the simplified taxation system by January 20, 2026 (inclusive). 

Alternatively, single tax payers may continue to apply the simplified taxation system and perform other non-prohibited activities, provided they cease performing security activities and make relevant changes to their registration data.

• By the Resolution of the Cabinet of Ministers of Ukraine dated December 29, 2025, No. 1768, the deadline by which individual entrepreneurs, payers of the single tax of group 1 (merchants), are obliged to ensure the possibility of performing cashless settlements with consumers has been postponed. 

In particular, such a requirement will become mandatory 3 months after the termination/cancellation of martial law, rather than January 01, 2026.

Conditions for taxpayers’ membership in the “White Business Club”

From January 01, 2026, the Law changes certain requirements for taxpayers that may be included in the List of taxpayers with a high level of voluntary compliance with tax legislation (hereinafter – the “List”). In particular:

• for legal entities, a requirement has been added regarding the mandatory presence in the Unified State Register of reliable information about the ultimate beneficial owner (or a mark indicating a justified reason for its absence in the ownership structure);
• for legal entities and individual entrepreneurs, it is established that the amount of fines applied to the taxpayer during the last 3 months for violation of tax obligations regarding the submission of reports and/or documents must not exceed 1 minimum salary (in 2026 – UAH 8 647), provided that they are paid, except for fines that are being appealed (previously, a requirement for the complete absence of facts of such violations was established);
• It is clarified that the average monthly salary accrued and/or paid by a tax agent (legal entity or individual entrepreneur) over the last 12 months must be equal to/exceed the average salary in the relevant industry in the relevant region, multiplied by a coefficient of 1.1, but not less than the amount of 1 minimum salary as of January 01 of the reporting year.

The Law also specifies that from the day following the day of the publication of the List, tax authorities shall not initiate, inter alia, on-site audits on specified issues, documentary unscheduled audits, except for specified exceptions, regarding taxpayers included in the List, except for cases where a copy of the order to conduct the relevant audit had already been sent and/or handed over to the taxpayer before the day of the List’s publication.

Specifics of reporting 

On January 01, 2026, certain provisions of the Law of Ukraine dated July 16, 2025, No. 4536-IX “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine in Connection with the Adoption of the Law of Ukraine “On Integrated Prevention and Control of Industrial Pollution” and with the Aim of Improving Certain Provisions of Tax Legislation” have entered into force.

They, inter alia, change the reporting periods for individual entrepreneurs and persons engaged in independent professional activities regarding the amounts of income accrued (paid) in favour of natural persons, the amounts of tax withheld from them, and the amounts of accrued single social contribution, namely, from monthly reporting to quarterly reporting with a monthly breakdown.

For legal entities, the procedure for submitting reports remains unchanged (monthly reporting).

In addition, from now on, quarterly reports with a monthly breakdown will be submitted by:

• private notaries, regarding notarized purchase and sale (exchange) agreements, gift agreements, certificates of the right to inheritance;
• individual entrepreneurs providing services for the conclusion of exchange transactions or participating in their conclusion, regarding the specified transactions. 

At the same time, state notaries (state notary offices) and legal entities providing services for the conclusion of exchange transactions or participating in their conclusion will continue to report monthly, as before.

Application of penalties

From January 01, 2026, transitional provisions mitigating liability for violations of tax legislation requirements regarding international automatic exchange of information, committed by financial agents and account holders, will cease to apply.

In particular, for the specified violations committed starting from January 01, 2026, penalties will be applied in full. 

We note that a transitional period was previously established: for violations committed before December 31, 2024, penalties were not applied, and for those committed during 2025, they were applied at a reduced amount.

If you have any questions regarding the functioning of your business or need legal advice in connection with the tax changes of 2026, please contact the specialists at GOLAW, and we will provide qualified legal support.