Ukraine: Ukraine enacts a package of anti-crisis tax changes

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Ukraine: Ukraine enacts a package of anti-crisis tax changes

kotenko.jpg

kalyta.jpg

Vladimir Kotenko


Iryna Kalyta

In an effort to fire-fight the treasury crisis, on March 27 2014 the Ukrainian Parliament passed law No. 4576 increasing tax rates and abolishing a number of tax exemptions. The majority of changes introduced by this law are supposed to take effect from April 1 2014. The new rules include:

  • Freezing the corporate profit tax rate and the VAT rate at their current level (18% and 20% respectively), instead of the initially planned gradual reduction to 16% and 17% respectively by 2016).

  • Introduction of 7% VAT on supply of pharmaceuticals and selected medical products (as opposed to existing VAT exemption). Tax treatment of importation of pharmaceuticals and medical products remains unclear (7% was apparently meant but poor wording of the law creates a risk of 20% VAT upon importation).

  • Re-introduction of a special purpose pension fund levy of 0.5% to be imposed on legal entities and individuals upon purchase of foreign currency.

  • Increase of rates of the following taxes and charges:

  • Excise tax on alcohol, tobacco, oil products and vehicles;

  • Air emission tax and waste dumping tax;

  • Radio frequency charge;

  • Special water use charge;

  • Land tax; and

  • Rates of subsoil duty.

  • Introduction of progressive personal income tax (PIT) rates of 15%, 17%, 20% and 25% on passive income of individuals (dividends, interest, and royalties). This rule will take effect starting July 2014.

More changes in tax regulations are expected, including those abolishing other tax exemptions.

Vladimir Kotenko (vladimir.kotenko@ua.ey.com) and Iryna Kalyta (iryna.kalyta@ua.ey.com)

EY

Tel: +380 44 490 3000

Fax: +380 44 490 3030

Website: www.ey.com/ua

more across site & shared bottom lb ros

More from across our site

It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
The sprawling legislation phases out Joe Biden-era green tax incentives for businesses; in other news, the UK will reportedly maintain its DST despite US pressure
New French legislation should create a more consistent legal environment for taxing gains from management packages, say Bruno Knadjian and Sylvain Piémont of Herbert Smith Freehills Kramer
The South Africa vs SC ruling may embolden the tax authority to take a more aggressive approach to TP assessments, an adviser tells ITR
Indirect tax professionals now rate compliance as a bigger obstacle than technology and automation; in other news, Italy approved a VAT cut on art sales
AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
Gift this article