TAX ALERT 22.04.2025 | Digest of Key Tax News

The law on the introduction of guaranteed excise tax liability was enacted

On April 01, 2025, the Law of Ukraine No. 4014-IX “On Amendments to the Tax Code of Ukraine and other Laws of Ukraine regarding the Excise Taxation Peculiarities of Ethyl Alcohol and Bioethanol” was enacted.

In particular, the Law stipulates that, temporarily, until Ukraine attains full membership in the European Union, but no later than January 01, 2030, producers of ethyl alcohol and bioethanol, when calculating the excise tax on the mentioned products, produced in the customs territory of Ukraine, take into account the value of the guaranteed tax liability on excise tax for a tax (reporting) period.

The said guaranteed tax liability is calculated according to the formula established by the Law and based on the maximum productivity of equipment for the production of ethyl alcohol and bioethanol.

It should also be noted that the maximum productivity of equipment for the production of ethyl alcohol and bioethanol is determined in accordance with the relevant Procedure approved by the resolution of the Cabinet of Ministers of Ukraine dated March 28, 2025, No. 350.

The first tax (reporting) period for which the guaranteed excise tax liability will be calculated is May 2025.

An alternative to the draft law on changing the deadlines for reporting on the amount of income accrued (paid) in favor of individuals is suggested

On April 01, 2025, the Verkhovna Rada of Ukraine registered draft law No. 13108-1 “On Amendments to the Tax Code of Ukraine and the Law of Ukraine “On Collection and Accounting of the Single Contribution for Compulsory State Social Insurance” to simplify the reporting mechanism for specific single contribution payers”.

This draft law is an alternative to the draft law No. 13108, a general overview of which we provided here.
It is worth noting that, unlike the main draft law, its alternative suggests the following changes:

Monthly submission of tax calculations of the amounts of income accrued (paid) in favor of individual taxpayers and the amounts of tax withheld from them, as well as the amounts of the accrued single social contribution, will be mandatory for taxpayers whose number of employees is:

• 10 or more;
• less than 10 and there is information (including information received from the employee) that the employee: receives social benefits, for which the income at the place of work is taken into account; acquires the right to receive pensions, unemployment benefits; is entitled to insurance payments in accordance with the Law of Ukraine “On Compulsory State Social Insurance”;
• less than 10, but the taxpayer has voluntarily chosen the monthly tax (reporting) period.
  If a taxpayer does not fall under any of the above-mentioned categories, such a taxpayer will have the right to choose a quarterly tax (reporting) period at their discretion.
  At the same time, the main draft law suggests a transition from monthly to quarterly submission of tax calculation of the amounts of income accrued (paid) in favor of individuals, with a breakdown by months of the reporting quarter, for all taxpayers.
  

In case of monthly payment of a single contribution to the obligatory state social insurance in the amount not less than the minimum insurance contribution (currently UAH 1,760), the following categories of single contribution payers will not submit reports to the tax authority:

• individual entrepreneurs, including those who have chosen the simplified taxation system (except for e-residents);
• members of a farming enterprise, unless they are persons subject to insurance on other grounds;
• persons who have entered into an agreement on voluntary payment of a single contribution.
  It is envisaged that information about insurance payments by the above categories of persons will be entered into the accounting system automatically upon the fact of crediting of funds.

Amendments to the corporate income tax declaration form have come into force

On April 04, 2025, the order of the Ministry of Finance of Ukraine dated February 13, 2025, No. 94 “On Approval of Amendments to the Form of Corporate Income Tax Declaration” came into force.

Such amendments are related to the implementation of the Laws of Ukraine No. 4015-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Balancing Budget Revenues during the Period of Martial Law” and No. 4113-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Stimulating the Development of the Digital Economy in Ukraine”. More details about the Laws mentioned above we covered here.

As informed by the State Tax Service of Ukraine in its letter dated April 09, 2025, No. 9616/7/99-00-21-02-01-07, corporate income tax payers must submit an updated form of the declaration starting from the reporting (tax) period – the half-year of 2025. At the same time, taxpayers declaring figures, the determination of which is related to changes to the provisions of the Tax Code of Ukraine, which entered into force in 2024, are recommended to submit a clarifying declaration using the updated form for the reporting (tax) period – 2024 and the first quarter of 2025, with the reflection of certain figures.

A review of Supreme Court practice in administrative cases for March 2025 is published

On April 15, 2025, the Cassation Administrative Court within the Supreme Court published a review of current judicial practice for March 2025.

In this review, the Supreme Court highlighted the positions, in particular, regarding:

• legal consequences of changing the rent rate for land plots of state and municipal ownership without amending the lease agreement. In particular, the Supreme Court noted that the Tax Code of Ukraine establishes a minimum rent rate (3% of the normative monetary value of the land plot). Changes in the rent rate above this minimum can be made only with the agreement of the lessor and the lessee and by amending the lease agreement. Without revising the terms of the existing agreement, the application of a new rent rate is unlawful, even if the local government body makes a decision to increase it (resolution of the Supreme Court as of March 06, 2025, in case No. 160/5643/23);
• cancellation of registration as a single tax payer and requirements for the procedure of audit and issuance of acts. Specifically, the Supreme Court noted that if the audit of a single tax payer was conducted with violations or the audit act does not contain sufficient evidence, the results of such an audit cannot be the basis for a decision to cancel the registration of a single tax payer (resolution of the Supreme Court as of March 18, 2025, in case No. 160/21398/24);
• application of a reduced tax rate on non-resident income. In this case, the court examined the issue of confirming the beneficial status of the recipient of income in the form of interest from a Ukrainian company for the purpose of applying a reduced tax rate. The Supreme Court upheld the conclusion of the court of first instance on the absence of beneficial ownership status of the income recipient – a Cypriot company, which in order to provide a loan to a Ukrainian company, received a loan from an affiliated legal entity from the British Virgin Islands (resolution of the Supreme Court as of March 18, 2025, in case No. 500/1744/24);
• recognition of a permanent establishment of a foreign company in Ukraine. In this case, the Supreme Court analyzed, in particular, the provisions of the Convention for the Avoidance of Double Taxation with the Republic of Cyprus regarding the application of a reduced tax rate on dividends and the definition of a permanent establishment. The court, having recognized the existence of a permanent establishment of a Cypriot company in Ukraine, concluded that the reduced rates under the Convention for the payment of dividends to such a non-resident cannot be applied (resolution of the Supreme Court as of March 20, 2025, in case No. 280/4264/21).