Rada approved the decision to introduce a 5% military tax: will it be retroactively collected.

The Verkhovna Rada increased the military tax rate

The Verkhovna Rada of Ukraine adopted a law to increase the military tax, but excluded the provision on its retroactive introduction. This decision was made during the vote on amendment No. 988 to law No. 3939-IX, which concerns taxation under martial law.

According to the new law, the military tax rate will increase from 1.5% to 5%. However, unlike the previous version, where the increase was planned from October 1, the tax will now be raised from the moment the law comes into force. This means that most taxpayers will not face the problem of retroactive payment.

According to the first deputy chairman of the parliamentary committee on finance, tax and customs policy, Yaroslav Zheleznyak, the rejection of this amendment led to the emergence of practical issues related to the implementation of the law. A provision on the algorithm of actions for tax agents when transitioning to the new rate in the middle of the month was adopted.

Committee chairman Danylo Hetmantsev criticizes the deputies' decision to reject the amendment. He points out that it contained important rules aimed at mitigating the consequences of the increased military tax for taxpayers. Among them is the possibility of offsetting the military tax when calculating the minimum tax liability for single tax payers, exempting e-residents from paying the tax, and benefits for sole proprietors during illness or leave.

Norms regarding the postponement of payment for the first month of the law's implementation and the prohibition of fines for non-payment in October were also not adopted. In addition, the possibility not to apply the 5% rate to income subject to declaration by the end of 2024 was canceled.

Despite these changes, simplified tax regime payers are still introducing the increased military tax from October 1. Hetmantsev expresses the opinion that such changes may create problems for taxpayers and suggests thanking the opposition for rejecting the committee's amendment.

It is worth noting that Ukrainians were warned that their salaries would decrease in October due to new taxes.