TAX ALERT 21.10.2025 | Digest of Key Tax News

Proposal to increase income tax for banks to 50%

On October 01, 2025, draft law No. 14097 “On Amendments to the Tax Code of Ukraine Regarding the Specifics of Taxing Banks with Corporate Income Tax in 2026” was registered in the Verkhovna Rada of Ukraine.

In particular, it proposes to set an increased corporate income tax rate of 50% for banks in 2026, with a simultaneous ban on reducing the financial result before taxation by the amount of losses from previous periods.

Reducing the tax burden on owners of non-residential real estate: draft law registered

On March 10, 2025, draft law No. 14112 “On Amendments to Article 266 of the Tax Code of Ukraine Regarding the Reduction of the Tax Base for Non-Residential Real Estate” was registered in the Verkhovna Rada of Ukraine.

The relevant document provides for a reduction in the tax base for non-residential real estate owned by individuals by 100 square meters.

Plans to update the procedure for issuing income certificates

On October 01, 2025, the Ministry of Finance of Ukraine has published a draft order “On Amendments to the Form of the Certificate of the Submitted Declaration of Property Status and Income (on the Payment or Absence of Tax Liabilities) and the Procedure for Preparing and Issuing the Certificate of the Submitted Declaration of Property Status and Income (on the payment or absence of tax liabilities)”.

In particular, it provides for an expansion of the list of information that the controlling authority is required to verify before issuing a certificate of income, namely:

• the accuracy of the income specified in the declaration by comparing it with the data available in the information systems of the controlling authority;
• the validity of the application of personal income tax rates and military tax;
• the correctness of the determination of tax liabilities and the completeness of their payment.

In the event of an application for a certificate in connection with the taxpayer’s departure abroad for permanent residence, the controlling authorities shall verify whether the taxpayer has fulfilled all obligations related to controlled foreign companies if he is a controlling person.

In this regard, it is also envisaged that the controlling authority may refuse to issue a certificate to a resident taxpayer who is leaving the country for permanent residence if:

• they have not fulfilled their obligations related to controlled foreign companies;
• the declared income has been found to be inaccurate, tax liabilities have been understated;
• there are unpaid amounts of tax or military tax.

The draft order also provides for technical changes – a field has been added to the application form to select the format for receiving the certificate: electronic or paper.

Extension of the effect of subordinate legislation in the field of accounting

On October 3, 2025, the Ministry of Finance of Ukraine published a draft order “On Amendments to Certain Regulatory Acts of the Ministry of Finance of Ukraine on Accounting”.

In particular, the document provides for the extension of a number of provisions and/or legislative acts in the field of accounting to branches of legal entities established in accordance with the legislation of a foreign state.

Therefore, the draft order introduces the following changes to the legislative acts listed below:

• The Instructions on the Application of the Chart of Accounts for Accounting for Assets, Capital, Liabilities and Business Transactions of Enterprises and Organizations (Order of the Ministry of Finance of Ukraine No. 291 dated November 30, 1999) specify that branches and representative offices of foreign legal entities may apply a simplified Chart of Accounts for Accounting for Assets, capital, liabilities and business transactions of enterprises along with other categories of entities;
• National Accounting Regulation (Standard) 25 “Simplified Financial Reporting” (Order of the Ministry of Finance of Ukraine No. 39 dated February 25, 2000) stipulates that this standard also applies to branches and representative offices of foreign legal entities with regard to their financial reporting, submission of indicators on employees and income;
• The Notes to the Annual Financial Statements (Order of the Ministry of Finance of Ukraine No. 302 dated November 29, 2000) stipulate that the standard form of financial statements No. 5 does not apply to branches and representative offices of foreign legal entities;
• The Simplified Chart of Accounts (Order of the Ministry of Finance of Ukraine No. 186 dated April 19, 2001) stipulates that branches and representative offices of foreign legal entities may also apply this chart;
• National Accounting Regulation (Standard) 31 “Financial Expenses” (Order of the Ministry of Finance of Ukraine No. 415 dated April 28, 2006) specifies that branches and representative offices of foreign legal entities recognize financial expenses as expenses for the reporting period for which they were accrued;
• National Accounting Regulation (Standard) 1 “General Requirements for Financial Reporting” (Order of the Ministry of Finance of Ukraine No. 73 dated February 7, 2013) adds a paragraph stating that branches and representative offices of foreign legal entities have the right to apply condensed financial statements;
• The Regulation on the Inventory of Assets and Liabilities (Order of the Ministry of Finance of Ukraine No. 879 dated September 2, 2014) specifies that this provision also applies to branches of foreign legal entities.

Amendments to Accounting Standard 26 “Employee Benefits”

On October 13, 2025, the Ministry of Finance of Ukraine published a draft order “On Approval of Amendments to National Accounting Regulation (Standard) 26 “Employee Benefits”.

In particular, the document provides for the following changes:

• a number of provisions of the standard apply not only to work, but also to services provided by an employee;
• the definitions of “work performed and/or service” and “payments to employees” have been clarified;
• it is specified that current payments also include non-monetary payments (medical care, housing, cars, services, etc.);
• it is specified that accrued payments to employees and amounts of unified social tax are recognized as expenses and current liabilities for the period in which the work is performed or services are provided, unless other national accounting provisions (standards) require such expenses to be included in the cost of the asset.

In this context, it is also established that if the amount paid exceeds the liability arising from the performance of work or provision of services before the reporting date, such excess is recognized as an asset in the amount in which the prepayment will reduce future payments and/or compensation;
it is determined that, the final settlement under a defined benefit plan occurs as a result of a change in the plan or its reduction, which leads to the termination of such a plan.

If a defined benefit plan that is terminated is replaced by a plan with similar terms, the final settlement under the defined benefit plan is not made;
it is established that the notes to the financial statements for each category of other long-term payments and severance payments shall contain the following information: the nature of the payments, the amount of the obligation for such payments, and the amount of funding as at the reporting date.

The draft order also specifies that actuarial assumptions shall include, among other things, the following demographic and financial indicators:

• the proportion of program participants who will choose each of the possible payment options provided for in the program terms and conditions;
• taxes payable by the program on contributions related to work performed and/or services provided up to the reporting date, or on payments resulting from the performance of such work and/or provision of services.