New Military Levy Rules Approved by Ukraine's Cabinet: Who Pays How Much.

Tax Bills Endorsed by Ukraine's Cabinet of Ministers

According to TSN.ua: On March 30, the Cabinet of Ministers of Ukraine approved three tax-related legislative proposals, one of which addresses the military levy. The document sets out payment conditions for this levy once martial law is lifted. The military levy is mandatory for all categories of taxpayers, underscoring its role in the country's funding system.

Military Levy Rates and Exemption Criteria

The rates of the military levy differ across taxpayer groups:

• For individual entrepreneurs (sole proprietors) in Groups 1, 2, and 4, the rate is 10% of the minimum wage. As of January 1, 2026, the minimum wage will be set at UAH 864.7.
• Single tax payers in Group 3 are required to pay 1% of their quarterly income.
• Entrepreneurs under the general taxation system pay 5% of their annual taxable net income.

Key exemptions from the military levy apply to certain taxpayer categories. For instance, sole proprietors in Groups 1 and 2 whose tax address is registered in temporarily occupied territories are exempt. Additionally, these entrepreneurs do not have to pay the levy if they operate without hired employees during their annual leave or during a documented illness lasting more than 30 days.

For salaried employees, the military levy rate is 5% of their accrued wages. Military personnel and staff of the Armed Forces of Ukraine, the Security Service of Ukraine, and other security agencies pay 1.5% on their cash allowance income. These changes aim to streamline the tax system and ensure stable funding amid challenging socio-economic conditions.

These amendments to tax legislation highlight the Ukrainian government's efforts to maintain financial stability and support entrepreneurs under martial law. The introduction of new military levy rules is designed to adapt the tax system to current realities and create more opportunities for business support, especially in conflict-affected regions. This move may also signal the government's intention to prepare the economy for post-war recovery.