TAX ALERT 17.02.2026 | Digest of Key Tax News

Some changes in the tax sphere are proposed

On February 06, 2026, Draft law No. 15012 “On Amendments to the Tax Code of Ukraine to Ensure the Stability of Tax Legislation during the Period of Martial Law in Ukraine” was registered in the Verkhovna Rada of Ukraine.

In particular, the draft law provides for:

• a moratorium on changes to the elements of taxes and fees for the period of martial law and for one year from the date of its termination or cancellation. 

Such elements include the object of taxation, taxpayers, the tax base, the tax rate, the procedure for calculating the tax, the tax period, the deadline and procedure for paying the tax, and the deadline and procedure for submitting reports on the calculation and payment of the tax;

• establishing that a taxpayer shall be presumed innocent of committing a tax offence until proven guilty in accordance with the procedure established by law.

At the same time, it is envisaged that certain restrictive measures may be applied to such a taxpayer only to the extent necessary to prevent illegal actions or evasion of liability;

• establishment of a new tax offence by the controlling authorities – unjustified and disproportionate to the objectives of the audit obstruction of the taxpayer’s economic activity by officials of the controlling authority during the actual audit;
• abolition of monthly advance payments for individual entrepreneurs for fuel retail outlets;
• deprivation of sole proprietors of groups I, II and IV, as well as single tax payers of group III, of the status of military tax payers;
• establishment of a single military tax rate of 1.5 per cent of the taxable amount.

Plans to update the rules for taxing post-war reconstruction costs

On February 06, 2026, Draft law No. 15011 “On Amendments to Section 4 of Chapter XX of the Tax Code of Ukraine Regarding Support for Enterprises Whose Production Facilities Were Damaged or Destroyed as a Result of Combat Operations” was registered in the Verkhovna Rada of Ukraine.

The draft law proposes to establish that, for the period of martial law in Ukraine, corporate income tax payers will have the right to reduce their financial results for the tax purposes by the amount of documented expenses for the restoration of production facilities damaged or destroyed as a result of the russian’s armed aggression against Ukraine.

The reduction in financial results may be made in an amount not exceeding 50 per cent of the taxpayer’s profits originating in Ukraine and abroad.

This right, as proposed, will belong to:

• corporate income tax payers whose tax address is located in the Chernihiv, Zaporizhzhia, Poltava, Sumy, Kharkiv, Kherson or Donetsk regions;
• electric power companies;
• residents of the Defence City.

The draft law also stipulates that the procedure for documentary confirmation of the relevant expenses for the restoration of production capacities will be determined by the Cabinet of Ministers of Ukraine. 

Proposed reduction in maximum single tax rates for 2026

On February 06, 2026, Draft law No. 15010 “On Amendments to Section 8 of Chapter XX of the Tax Code of Ukraine Regarding Support for Single Tax Payers During the Economic Downturn” was registered in the Verkhovna Rada of Ukraine.

As an exception for 2026, it is proposed to set fixed single tax rates:

• for the first group – no more than 5% of the subsistence minimum (currently – 10%); 
• for the second group – no more than 10% of the minimum wage (currently – 20%);
• for the third group for the first and second quarters of 2026 – 0% (currently – 3% and 5% depending on VAT payment);
• for the fourth group regarding agricultural land under closed soil conditions – with a reduction coefficient of 0.5 from the current rates (the current rate is 6.33).

“Free hryvnia”: plans to create a new tax regime

On February 06, 2026, Draft law No. 15009 “On Amendments to the Tax Code of Ukraine Regarding the Introduction of a Special Fiscal Regime “Free Hryvnia” was registered in the Verkhovna Rada of Ukraine.

In particular, the draft law provides for the creation of a voluntary tax participation system for individuals and legal entities (residents and non-residents). 

“Free hryvnia” involves opening a special bank account and collecting a fixed contribution from the balance of funds in this account as of the last day of each calendar month. As a result of the corresponding write-off, the taxpayer under the “Free Hryvnia” regime will be deemed to have fulfilled their obligations to pay corporate income tax, personal income tax, VAT and military tax. Transactions outside the “Free Hryvnia” regime will be taxed according to the general rules.

It is planned that during the first three years, the “Free Hryvnia” will operate in test mode and will only be available to taxpayers whose tax address is located in the city of Kyiv.

The fiscal contribution rate will be set by the Cabinet of Ministers of Ukraine from 1 to 3 per cent of the calculation base, and after the successful completion of the test mode – by the law of Ukraine.

It is also proposed that in the event of cash withdrawal from a special account or transfer of funds from a special account to a personal account of an individual, which is not a special account within the “Free Hryvnia” regime, an exit fee will be charged, the amount of which will also be set by the Cabinet of Ministers of Ukraine, and after the successful completion of the test mode – by the law of Ukraine.

For the purpose of organising management, coordinating actions, representing the interests of taxpayers and forming proposals for improving the “Free Hryvnia”, a self-regulatory organisation will be created, founded by participants in this tax regime.

The form of the declaration of property status and income and instructions for filling it out have been updated

On February 06, 2026, the order of the Ministry of Finance of Ukraine “On Amendments to the Form of the Tax Declaration of Assets and Income and Instructions for Completing the Tax Declaration of Assets and Income” dated January 05, 2026, No. 2 came into force.

The declaration, namely its appendix Ф3, which contains a list of persons who are allowed to apply a tax credit when paying rent for housing, has been supplemented with combatants and persons with disabilities as a result of war. The relevant changes have also been made to the instructions for completing the aforementioned reporting document. 

We would like to remind you that, as of recently, the personal income tax credit can be applied to the amount of rent actually paid not only by taxpayers with internally displaced person status, but also by combatants and persons with disabilities resulting from war. We wrote about these legislative changes in more details here.

The Supreme Court confirmed the legality of refusing to register tax invoices in the absence of explanations from the taxpayer

On February 02, 2026, the judgement of the Administrative Court of Cassation within the Supreme Court dated January 30, 2026, in case No. 260/224/24 was made publicly available.

In particular, the court examined the legality of the tax authorityʼs refusal to register a tax invoice on the grounds that the taxpayer failed to provide additional explanations and copies of documents at the request of the tax authority within the procedure for suspending the registration of the tax invoice.

The taxpayer thought that the refusal was made on formal grounds and emphasised that the submission of additional explanations was his right, not his obligation, and therefore their non-submission could not automatically lead to the refusal to register the tax invoice, provided that the initial set of documents sufficient to confirm the actual performance of the economic transaction had been submitted.

Despite this, the Supreme Court concluded that refusal to register a tax invoice in the event of failure to provide or partial provision of the requested explanations and documents by the taxpayer is not a manifestation of excessive formalism on the part of the tax authority, but a consequence of the taxpayer’s failure to comply with the procedural obligation established by law, which, in turn, makes it impossible for the tax authority to perform its function of assessing the sufficiency and relevance of the submitted materials.

Thus, the taxpayer’s failure to provide additional explanations and documents directly requested by the tax authority within the procedure for suspending the registration of a tax invoice is an independent and sufficient ground for deciding to refuse its registration, provided that the tax authority complies with the requirements of the law regarding the content and form of the relevant notification.