Freelancer Tax Overhaul: Rate Slashed from 23% to Just 10%.

Ukraine Streamlines Tax Rules for Digital Workers

According to Novyny.live: Ukraine is simplifying tax regulations for citizens earning income through online platforms, including delivery services, short-term rentals, and freelance work. Under draft law No. 15111-d, a flat 10% tax rate will replace the current 23% levy. This reform aims to ease administrative burdens for individuals conducting business over the internet.

The 10% tax will be automatically deducted at source by the platforms themselves. However, no tax will be applied if:

• the individual's annual income does not exceed €2,000;
• the number of transactions is fewer than 30 per year.

Once martial law ends, the rate will drop further to 6.5%, and if the military surcharge is abolished, it will fall to 5%.

New Rules Set for 2027 Launch

The new framework is scheduled to take effect on January 1, 2027, giving Ukrainians time to prepare for the changes. To use the new tax mechanism, individuals will need to verify their identity using passport data and a tax identification number. These adjustments could significantly reshape tax policy for freelancers and the broader online workforce.

This policy shift offers substantial benefits for Ukrainian freelancers and small business owners by simplifying financial reporting and reducing their tax burden. Lower rates and clearer rules may also spur growth in the country's digital economy, especially amid ongoing economic challenges. Over time, these changes could encourage more people to become self-employed, potentially boosting the labor market and overall economic resilience.