From January 1, 2025, new taxation rules will enter into force in Ukraine, which will affect individual entrepreneurs (PPOs) and other categories of citizens. The main change will be an increase in military levy rates, which is aimed at ensuring the financing of the country's military needs.
What will change for FOPs?
Individual entrepreneurs who work under the simplified tax system will pay the military levy depending on their group:
- FOEs of the first, second and fourth groups : the tax rate will be 10% of the minimum wage (8,000 UAH). Thus, the monthly payment will be UAH 800.
- Non-profit organizations of the third group : will pay 1% of their turnover. The first payments at this rate are expected based on the results of the first quarter of 2025.
Changes for individuals
New rules are also being introduced for individuals:
- From January 1, 2025, all incomes indicated in the annual declaration will be taxed with a military levy at the rate of 5%.
- Some types of income, for example, from transactions with property or inheritance, will be taxed at an increased rate of 5% already from December 1, 2024.
- Income from domestic government bonds (OVDP) and military bonds remain tax-exempt.
At the same time, social benefits such as pensions, scholarships and benefits will not be subject to military duty.
Why are taxes rising?
The changes were enshrined in the so-called "resource" law No. 11416-d, which was signed by President Volodymyr Zelenskyi. The main goal is to increase the financing of military expenses, which in 2025 will amount to 2.23 trillion hryvnias or 26.3% of GDP.
This decision caused a lot of discussion, but the government emphasizes the need for such measures in the current conditions.
For military personnel and employees of law enforcement structures, the military tax rate will remain at the level of 1.5%.
