Increase in military tax: tax changes and their impact on business

Legislative changes regarding taxes, in particular the increase in military tax, are becoming relevant in Ukraine. The bill proposing an increase in the military tax rate from 1.5% to 5% has already been approved by the Verkhovna Rada. Such changes will affect both individuals and individual entrepreneurs (IE). However, it is important to take into account that these changes have certain features that should be understood by all participants in the business environment.

Changes in taxation for individuals and sole proprietors

A significant change is the increase in the military tax rate from 1.5% to 5%. For private entrepreneurs of the third group, a military tax of 1% is additionally introduced. It is important to note that this new tax burden will be directed exclusively to the financing of the Armed Forces of Ukraine through a special fund.

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Features of introducing new rates

The tax calculation submitted by tax agents (including employers) will be submitted monthly, rather than quarterly as was previously the case. This obliges businesses to more actively monitor changes in legislation and submit reports in a timely manner.

Accrued income before October 1, 2024 will be taxed at the old rate of 1.5%, regardless of the date of actual payment.

Impact on the state budget

The increase in the military tax is expected to bring additional revenue to the budget: UAH 27.3 billion in 2024 and UAH 107.7 billion in 2025. In addition, the new tax on private entrepreneurs of the third group in 2025 will add another UAH 5.9 billion.

How will the increase in military tax affect business?

For business, these innovations mean significant changes in the planning of financial flows. The increase in income taxes, as well as the increase in military tax rates, will affect the distribution of resources of enterprises, forcing them to look for new approaches to optimizing expenses.

Calculate the cost of an accountant's help

These changes require increased attention to detail and timely reporting for accounting services that perform accounting and tax reporting. Therefore, outsourcing accounting services is becoming even more relevant since it ensures a professional approach to managing an enterprise's financial affairs in the context of constant changes in tax legislation.

The advantages of cooperation with Prikhodko and Partners - from consultations to full support

With tax laws changing frequently, the support of a professional accounting partner is critical for any business. Our company offers comprehensive accounting services covering all aspects of financial accounting and tax reporting. Here's why you should contact us:

• Individual consultations: We help you understand the innovations and their impact on your business, offering specific solutions to optimize your tax burden.
• Full support: We take on all tasks related to bookkeeping and tax reporting, allowing you to focus on business development.
• Deep knowledge of legislation: Our experts constantly monitor changes in legislation and ensure their correct application in your company.
• Quality and timeliness guarantee: We guarantee the accuracy and timeliness of reporting, which minimizes the risk of penalties and additional costs.
• Flexibility and adaptability: We work with both large enterprises and small businesses, adapting our services to your needs.
• Comprehensive solutions: In addition to basic services, we offer analysis and optimization of financial processes, which helps you effectively manage your company's resources, as well as legal services for business.

By contacting us, you receive not just accounting support, but a reliable partner who will help you navigate the complex world of financial accounting and taxes, providing confidence in the future.