TAX ALERT | Digest of Key Tax News 20.01.2025

The provisions of the law on stimulating the development of the digital economy came into force

On January 1, 2025, certain provisions of the Law of Ukraine No. 4113-IX, dated December 4, 2024, “On Amendments to the Tax Code of Ukraine and Other Legislative Acts Regarding the Stimulation of the Digital Economy in Ukraine”, came into force. The general overview of the changes introduced by this Law was provided in our news digest as of January 7, 2025.

The provisions of the Law that came into force in January, in particular, include the following:

• regulation of the issue regarding payment of PIT by tax agents – residents of “Diia City”. The stated payers are allowed to PIT at a rate of 5% until December 31 of the year following the year they acquire the status of “Diia City” resident, even if they do not meet the requirements regarding the average number of employees and gig specialists (at least nine people), under certain conditions;
• regulation of the issue regarding calculating the single social contribution by residents of “Diia City” for months of non-compliance with the legal requirements regarding the average number of employees;
• exemption from CIT during the martial law period of the transactions of “Diia City” residents related to the voluntary transfer of funds, goods, performance of works or provision of services in favor of the Armed Forces of Ukraine, other military formations as well as transactions of transferring funds to the accounts of state bodies opened by the National Bank of Ukraine to support defense and humanitarian aid.

Martial law exemptions for unified social contribution (USC) are canceled

On January 1, 2025, the Law of Ukraine No. 4059-IX, dated November 19, 2024, “On the State Budget of Ukraine for 2025”, came into force.

This Law, inter alia, suspends for 2025 certain provisions of the Law of Ukraine “On the Collection and Accounting of the Unified Social Contribution to the Mandatory State Social Insurance”, which allowed the following categories of individuals to refrain from paying USC for themselves from March 1, 2022, until the termination or cancellation of martial law in Ukraine and for 12 months thereafter:

• individual entrepreneurs, including those on the simplified taxation system (except e-residents);
• individuals engaged in independent professional activities;
• members of farming enterprises, provided they are not subject to insurance on other grounds.

Thus, in 2025 individual entrepreneurs on the simplified taxation system are required to pay USC in the amount of at least UAH 1,760 per month, while individual entrepreneurs on the general taxation system, individuals engaged in independent professional activities, and members of farming enterprises must pay USC at a rate of 22% of their income (profit), but not less than UAH 1,760 per month.

The Law also suspends for 2025 the provision of the Law of Ukraine “On the Collection and Accounting of the Unified Social Contribution to the Mandatory State Social Insurance” regarding the maximum base for USC calculation and increases such maximum base from 15 to 20 minimum wages. Therefore, in 2025, the maximum USC amount at a 22% rate is UAH 35,200.

The exemption from VAT and customs duty on components of unmanned systems imported by individuals is suggested

On January 9, 2025, the following draft laws were registered in the Verkhovna Rada of Ukraine:

• No. 12395 “On Amendments to Subsection 2 of Section XX of the Tax Code of Ukraine on Exemption from Value Added Tax on Importation of Components of Unmanned Systems by Individuals”;
• No. 12396 “On Amendments to Section XXI of the Customs Code of Ukraine on Exemption from Import Duty on Components of Unmanned Systems Imported by Individuals”.

These draft laws suggest, among other things, for the period of martial law in Ukraine, to exempt from VAT and customs duty the importation of components of unmanned systems by individuals, provided that they are used for the production and/or repair of unmanned systems (classified under commodity headings 8806 under UKT ZED). Such systems must be further transferred free of charge to military formations within 180 days from the day of import of relevant components.

It should be noted that previously under Laws No. 3123-IX and No. 3124-IX, exemptions from VAT and customs duty on the import of goods for the production and/or repair of unmanned systems were introduced only for business entities.

Draft law on the improvement of excise tax administration is registered

On January 14, 2025, the Verkhovna Rada of Ukraine registered draft law No. 12408 “On Amendments to the Tax Code of Ukraine regarding the Electronic Administration System for Fuel and Ethyl Alcohol Sales and the Improvement of Excise Tax Administration”.

The main purpose of the draft law is to ensure the presence in the electronic administration system the information about fuel owners and to strengthen control over the payment of excise tax on the sale of fuel and ethyl alcohol.

The suggested changes provide, inter alia, the following:

• showing the information about the owner of fuel in the electronic administration system for fuel and ethyl alcohol sales (SЕА RРSЕ) as a result of entering the relevant data into excise invoices;
• taxation of the volumes of fuel/ethyl alcohol that are actually located in the taxpayer’s excise warehouse and exceed volumes specified in SЕА RРSЕ’s records, if there is no documentary evidence of their circulation;
• introduction of the liability for: storing fuel/ethyl alcohol without registration as an excise taxpayer; discrepancies between actual volumes of fuel/ethyl alcohol and SЕА RРSЕ data without documentary confirmation of receiving or selling such goods; the absence, through the fault of the excise taxpayer, of an application in SEA RPSE to replenish the remaining volume of fuel/ethyl alcohol after the expiration of 10 calendar days from the date of receipt by the taxpayer of the tax notice-decision on the application of a fine for exceeding the volume of fuel/ethyl alcohol;
• cancelation of the excise warehouse registration by the decision of the tax authority in case of license termination, or absence of registered flow meters, or the absence of an excise warehouse at its location within 10 calendar days from the date of discovery of such facts;
• a list of cases in which excise invoices and adjustment calculations are not accepted and are not registered in the relevant register has been determined.

Tax exemption for enterprises employing war veterans is suggested

On January 13, 2025, draft law No. 12399 “On Amendments to the Tax Code of Ukraine regarding Tax Exemption for Enterprises where 60% of employees are war veterans” was registered.

The draft law offers to exempt from taxation for 5 years the profits of enterprises where at least 60% of the average number of employees at the main place of work, are war veterans.

Currently, the draft law is still being considered by a committee of the Verkhovna Rada of Ukraine.

Order on changes to the form and content of payment documents came into force

On January 11, 2025, the order of the Ministry of Finance of Ukraine No. 601, dated November 22, 2024, “On Amendments to the Order of the Ministry of Finance of Ukraine No. 13 dated January 21, 2016” came into force.

This order, inter alia, has amended the Regulation on the Form and Content of Payment Documents/Electronic Payment Documents, in particular, the list of mandatory details of the fiscal receipt.

At the same time, on January 11, 2025, the Order of the Ministry of Finance of Ukraine No. 674, dated December 30, 2024, came into force. This Order allows forming with the help of (software) registrars of payment transactions, which are included in the State Register of Registrars of Payment Transactions before January 11, 2025, of payment documents (fiscal receipts) in the old form without taking into account the above-mentioned changes.

An explanatory letter on changes in taxation of “Diia City” residents is published

On January 3, 2025, the State Tax Service of Ukraine published explanatory letter No. 1/2025: Regarding specific amendments to the Tax Code of Ukraine related to corporate income tax, introduced by the Law of Ukraine “On Amendments to the Tax Code of Ukraine and Certain Other Legislative Acts Regarding the Stimulation of the Digital Economy in Ukraine”.

The letter provides taxpayers with clarifications on the following key issues:

• changes to the process of acquiring the status of “Diia City” resident;
• application of tax exemptions for pension contributions and insurance payments made by “Diia City” residents;
• exemption from taxation for charitable donations made by “Diia City” residents for the state’s defense.