Tax increases: what has changed and who will be affected

Starting January 1, the military tax on individuals' salaries will increase from 1.5% to 5%. Changes in taxation also apply to individual entrepreneurs, UNN writes.

For sole proprietors of the first, second and fourth groups, the military tax rate will be 10% of the minimum wage, which is set at UAH 8,000 as of the beginning of 2025. This means that the military fee for such sole proprietors will be UAH 800 per month. The changes apply to the payment of this fee starting from January 1, 2025.

Single tax payers of the third group, both individual entrepreneurs and legal entities, will have to pay a military tax of 1% of their turnover, and the first payments will be made in the first quarter of 2025.

Also, the military fee will not be charged retroactively. That is, individuals will not be forced to pay the fee for 2024, and their total annual income for 2024 will be subject to the military fee at a rate of 1.5%.

However, certain income, in particular from property transactions, as well as income in the form of the value of inherited or donated property, will be subject to military duty at a rate of 5% from 1 December 2024.

Starting from January 1, 2025, the military tax rate for all personal income to be reported in the annual tax return will increase to 5%.

Significant changes also apply to the taxation of domestic government bonds, including military bonds. They will continue to be exempt from personal income tax (PIT) and military duty.

Social payments, pensions, scholarships and other income that are not subject to personal income tax will also not be subject to military duty.

It is worth noting that the military and law enforcement officers will remain subject to the military duty rate of 1.5%, as provided for by law for this category of persons.