TAX ALERT 29.12.2025 | Digest of Key Tax News

A law has been adopted introducing a number of changes in the field of taxation

December 08, 2025 – Law of Ukraine No. 4635-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding the Specifics of Taxing Banks with Corporate Income Tax in 2026 and Postponing the Effective Date of the Electronic System for the Circulation of Alcoholic Beverages, tobacco products and liquids used in electronic cigarettes” (formerly draft law No. 14097 of 01.10.2025) was submitted to the President of Ukraine for signature.

We previously wrote about the draft of the aforementioned regulatory act. At the time of its registration in parliament, it only concerned a 50% increase in the income tax rate for banks. At the same time, the current version of the law, adopted on the basis of the aforementioned draft law, in addition to the above-described changes in the taxation of banks, contains, in particular, the following provisions:

• postponement of the launch of electronic excise tax stamps until November 1, 2026;
• exemption of financial institutions from the obligation to pay personal income tax and military tax in cases of bankruptcy of individuals;
• extension of VAT exemptions in the energy sector until January 1, 2029;
• extension of VAT exemptions for UAVs, thermal imagers, anti-drone guns and other defence equipment until January 1, 2027;
• clarification of the conditions for membership in the White Business Club, in particular regarding penalties imposed on the payer, information on the ultimate beneficial owner in the Unified State Register, and the average monthly salary of the payer’s employees;
• the possibility of applying a single tax to security activities has been abolished;
• abolition of VAT exemptions for electric motor vehicles from January 1, 2026;
• abolition of the obligation to accrue compensatory VAT liabilities for transactions involving the supply of defence goods (not only for supplies under state defence procurement contracts);
• real estate in the occupied zone will not be considered when determining the real estate tax base.

A moratorium on changes to the rules for taxation of sole proprietors on a single tax is planned

December 12, 2025 – Draft law No. 14295 “On Amendments to the Tax Code of Ukraine Regarding a Moratorium on Changes to the Taxation Rules for Individual Entrepreneurs” was registered in the Verkhovna Rada of Ukraine.

In particular, the draft law provides for a ban on the following for the period of martial law and until the end of the year in which martial law is terminated or cancelled:

• increasing the single tax rates for individual entrepreneurs and expanding the single tax base provided for in Chapter 1 of Section XIV of this Code, “Simplified System of Taxation, Accounting and Reporting”, as of January 1, 2026;
• to increase the list of types of entrepreneurial activity, effective as of January 1, 2026, which cannot be carried out by individual entrepreneurs who are single taxpayers of the relevant group;
• expand the list of buyers – counterparties, effective as of January 1, 2026, with whom sole proprietors of the relevant single tax group cannot use the simplified taxation system;
• cancel (restrict) the right to exclusively voluntary registration of sole proprietors of the third group as value added taxpayers, subject to compliance with the maximum annual income limit set as of January 1, 2026;
• reduce the maximum annual income limit for sole proprietors of the third group as a prerequisite for their mandatory registration as value added taxpayers;
• set different tax rates for individual entrepreneurs of the relevant group depending on the type of entrepreneurial activity.

The draft law also stipulates that violation of the above provisions will be considered a violation of the Constitution, which prohibits the narrowing of the content and scope of existing rights and freedoms when adopting new laws or amending existing ones.

December 12, 2025 – A similar draft law No. 14285 was registered in the Verkhovna Rada of Ukraine, which provides for identical prohibitions on changes to the rules for taxation of individual entrepreneurs on a single tax, but with their effect limited only to the period of martial law. However, this draft law has now been withdrawn.

New developments in the taxation of individual investment

December 12, 2025 – Draft law No. 14296 “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding Mechanisms for Encouraging Individual Investment and Supporting National Issuers” was registered in the Verkhovna Rada of Ukraine.

The draft law proposes the introduction of personal investment accounts (PIA). PIAs are opened in investment firms for investment activities by individuals who are residents of Ukraine.

Among other things, the draft law provides for exemption from personal income tax and military tax on income from transactions with funds recorded in PIA and invested in securities of Ukrainian issuers, except in the following cases:

• early withdrawal of funds from the IIS to the taxpayer before the expiry of 1825 days from the date of the first deposit;
• early closure of the PIA at the initiative of the parties (termination of the agreement), if this is not related to a change in the investment firm or the application of sanctions to the relevant firm;
• payment of funds to the taxpayer’s heirs before the expiry of 1825 days;
• transfer of funds to third parties, except for securities purchase and sale transactions, budget payments or full transfer of funds to another investment firm;
• write-off or transfer of securities from the PIA to settle obligations to third parties, except for permitted investment, budgetary or corporate transactions.

It is established that for the purposes of tax exemption, a taxpayer may have only one PIA.

The draft law also provides for the obligations of investment firms, in particular:

• informing the tax authorities, in particular, about the opening and closing of a PIA, about the balance of funds in such an account in the event of a change of investment firm;
• keeping records of the taxpayer’s investment profits or losses, as well as income and expenses on the PIA;
• by March 1 of the year following the reporting year, submit a report on the acquisition or disposal by the taxpayer of securities acquired with funds from the PIA;
• perform the functions of a taxpayer’s tax agent with respect to income from transactions through PIAs.

As for the tax authorities, they are required to keep records of PIAs and apply sanctions in case of violation of reporting requirements by investment firms.

If the bill is adopted, the relevant changes are planned to be introduced on January 1, 2027.

Changes to the corporate income tax return

December 11, 2025 – The State Tax Service of Ukraine published on its website a draft order of the Ministry of Finance of Ukraine “On Approval of Amendments to the Form of the Corporate Income Tax Return”.

In particular, the document provides for:

• the addition to section “Indicators” line 02.1 regarding income (profits) received by a legal entity – a single tax payer of the fourth group when carrying out transactions for the sale or other alienation of securities, and income received from the issuer of corporate rights, investment certificates or other securities certifying its ownership of a share (stake) in the property (assets) of the issuer in connection with the distribution of part of its profits, and calculated in accordance with accounting rules;
• adding the above-mentioned line 02.1 to the calculation of the tax base in line 04;
• introduction of a new annex to the single tax “Income (profits) received by a legal entity – a single taxpayer of the fourth group”.