Military Tax Rate and Minimum Wage Changes

On November 28, 2024, the President of Ukraine signed Law No. 4015-IX, also known as Draft Law No. 11416-d, introducing significant amendments to the Tax Code. These changes, effective December 1, 2024, with some provisions starting January 1, 2025, aim to enhance tax administration and increase revenues. Below is a summary of the most notable changes:

Military Tax (MT)

Increased MT Rate: From December 1, 2024, the MT rate on personal income (e.g., wages, dividends, benefits) increases from 1.5% to 5%. Exceptions include military personnel, law enforcement employees, and certain tax-exempt incomes (e.g., pensions, scholarships, and military bonds).

Obligations for Unified Taxpayers:

• Private entrepreneurs in the 1st, 2nd, and 4th groups must pay a monthly MT equal to 10% of the minimum wage (currently UAH 710), regardless of income, starting October 1, 2024. Payments are due by the 20th of each month.
• Unified taxpayers in the 3rd group must pay 1% of their income as MT quarterly, within 10 days after filing the quarterly declaration.

Reporting Changes

The Law reduces the reporting period for several taxes to a monthly schedule, including income tax, single social contributions, and MT. Specific reporting obligations apply to:

• Notaries certifying property transactions.
• Businesses involved in exchange agreements.
• Credit unions distribute interest to members.

Minimum Wage

Effective January 1, 2025, the minimum wage is established as follows:

• Monthly rate: 8,000 UAH
• Hourly rate: 48 UAH

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Ukraine – Military Tax Rate and Minimum Wage Changes

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