Tax reform in Ukraine 2025: key changes for business

As of January 1, 2025, significant changes to Ukraine’s tax legislation have come into force. These updates affect both large enterprises and small and medium-sized businesses. In this article, we outline the key changes every entrepreneur and company should consider for effective business planning.

Changes in Corporate Profit Taxation

1. Increase in corporate tax rates

For financial institutions (excluding insurance companies), the corporate income tax rate has increased from 18% to 25%. For banks, the rate for the 2024 fiscal year is set at 50%.

2. Updates for Diia City residents

Diia City residents are exempt from the "exit capital tax" on pension contributions and insurance payments under voluntary health insurance contracts made on behalf of their employees and gig specialists.

3. Expense and transaction recognition

From March 25, 2025, expenses and transactions suspected of being associated with unlawful benefits to officials will no longer be deductible when calculating taxable profit.

Changes for Individual Entrepreneurs (FOP)

1. Mandatory unified social tax (UST) reinstated

Starting in 2025, FOPs must pay the Unified Social Tax (UST) at 22% of the minimum wage, amounting to 1,760 UAH per month.

2. New unified tax rates

The 2025 unified tax rates for FOPs are as follows:

• Group 1: 302.80 UAH/month (10% of the subsistence minimum).
• Group 2: 1,600 UAH/month (20% of the minimum wage).
• Group 3: 5% of revenue (or 3% with VAT).

3. Introduction of the military levy

FOPs are required to pay a military levy:

• Groups 1 and 2: fixed amount of 800 UAH/month.
• Group 3: 1% of revenue.

Changes in Reporting and Administration

1. Monthly reporting requirement

Starting in 2025, monthly reporting on PIT, military levy, and UST is mandatory. The Ministry of Finance will approve new reporting forms for FOPs, and the State Tax Service of Ukraine will introduce corresponding e-forms.

2. VAT changes and cancellation of benefits

The deferral of VAT payment on imported equipment and components has been canceled. Additionally, the procedure for calculating the sale price of used vehicles has been updated.

Conclusion

The 2025 tax reform significantly reshapes the tax landscape for businesses in Ukraine. Higher profit tax rates, the reinstatement of mandatory UST for FOPs, the military levy, and new reporting requirements call for careful review and adjustment of financial strategies. It's important to stay informed and seek professional support when needed to mitigate tax risks.

FAQ

What are the key changes in profit taxation in 2025?

The main changes include a profit tax increase to 25% for financial institutions and up to 50% for banks, as well as new limitations on deducting questionable expenses and transactions.

How will taxation for FOPs change in 2025?

FOPs must pay UST at 1,760 UAH/month, a unified tax based on their group, and a military levy (800 UAH/month for Groups 1 and 2, 1% of revenue for Group 3).

What reporting changes are expected in 2025?

Mandatory monthly reporting on PIT, military levy, and UST. Some VAT benefits are revoked, and procedures for used vehicle sales are revised.

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