Tax Increase, ePermit, the First War Risk Insurance, Customs Reboot

Verkhovna Rada Adopts Draft Law on Tax Increase in First Reading

This refers to Draft Law No. 11416-d dated 30.08.2024 on amendments to the Tax Code of Ukraine regarding the peculiarities of taxation during martial law.

The currently adopted version of the Draft Law provides for the following:

Increasing the general military levy rate from 1.5% to 5%;
establishing a military levy rate of 1% of income for single tax payers of group III;
establishing a military levy for individual entrepreneurs of groups I, II and IV of the single tax in the amount of 10% of the minimum wage;
monthly reporting of personal income tax (which, according to the Verkhovna Rada Committee on Finance, Tax and Customs Policy, is necessary for the purposes of launching economic booking);
setting the corporate income tax rate for non-bank financial institutions (except for insurers) at 25%;
50% corporate income tax rate for banks in 2024.

The military levy at the above rates for individual entrepreneurs of groups I, II and IV, as well as for single tax payers of the third group, will be established from 1 October 2024 to 31 December of the year in which martial law is terminated or canceled.

As for the entry into force of the law, the current wording of the draft law stipulates that the law, if adopted by the Verkhovna Rada of Ukraine and signed by the President, will enter into force on 1 October this year.

However, given the estimated time required to prepare the draft for the second reading (the second reading of the draft law is expected to take place closer to mid-October), the effective date is likely to be postponed.

Law on State Budget of Ukraine for 2025 has been Registered in the Parliament

On 14 September 2024, the Verkhovna Rada of Ukraine received Draft Law No. 12000 on the State Budget of Ukraine for 2025.

The document is currently being reviewed by the Parliamentary Committee on Budget.

The Law provides for the following key macroeconomic indicators:

State budget revenues at UAH 2.3 trillion, expenditures at UAH 3.9 trillion, and the maximum budget deficit at UAH 1.64 trillion;
the minimum wage and subsistence level remain at the level of December 2024.

According to the macroeconomic forecast accompanying the Draft Law on the State Budget, the following is expected:

in 2025, GDP growth will slow down, with GDP growing by 2.7% (compared to 3.5% in 2024);
the growth of the consumer price index (CPI) will accelerate from 7.9% at the end of 2024 to 9.5% at the end of 2025;
the average annual exchange rate of the US dollar will amount to UAH 40.8 in 2024, and in 2025 it will reach UAH 45 per US dollar.

Also, the Draft Law on the State Budget of Ukraine for 2025 provides for the suspension of the provision of paragraph 199 of Section VIII of the Law “On Collection and Accounting of the Single Contribution for Obligatory State Social Insurance”), which, starting from 1 March 2022 until the termination of martial law and for the next 12 months, entitled all individual entrepreneurs not to charge, calculate or pay the single contribution for themselves.

ePermit System to Be Launched on 18 September

According to the announcement of the Ministry of Economy, the Unified State Electronic System of Permits (ePermit) will soon be launched. On 18 September, the first electronic service will be available to entrepreneurs.

In particular, it will be a service for registering a declaration of compliance of the material and technical base with the requirements of labor protection legislation. This electronic service is required for companies that use heavy machinery and equipment in their production.

“Previously, the declaration was registered by the territorial center of the State Labor Service within five days. From now on, businesses will be able to submit the declaration conveniently and quickly in one click, and the ePermit system will automatically check and register it,” explain in the Ministry.

It is currently known that the Government is working to expand the list of services that businesses can receive through ePermit. Thus, at a meeting on 13 September, the Government added to this list the conclusion of the Ministry of Economy, which gives the right to extend the deadline for settlements for export-import operations.

As a reminder, the Government made the decision to launch the ePermit at a meeting on 5 July 2024, as approved by the Cabinet of Ministers of Ukraine in its Resolution No. 795 dated 5 July 2024.

ECA Recently Insured the First Investment Loan Against War Risks

As the Ministry of Economy informs, the Export Credit Agency (ECA) has recently signed the first war risk insurance contract for an investment loan.

The possibility of insuring investments against war risks is provided for in the amendments to the Law “On Financial Mechanisms for Stimulating Export Activities”. In May 2024, the ECA began accepting applications from investors in export-oriented enterprises for the use of insurance products.

The team of Syrota, Dzis, Melnyk & Partners has already covered the topic of investment insurance against war risks.

In particular, in a post dated 24 April 2024, we describe what exactly is classified as military and political risks.

Also, to better understand the essence and necessity of this mechanism, we recommend reading the article of Dmytro Syrota, our Managing Partner.

Verkhovna Rada Adopts Law on “Customs Reboot”

On 17 September, the Verkhovna Rada of Ukraine adopted in the second reading Draft Law No. 6490-d on Amendments to the Customs Code of Ukraine on Establishing the Specifics of Service in Customs Authorities and Certification of Customs Officials, better known as the “Customs Reboot” Law.

The adopted Law, inter alia, provides for:

updated procedure for competitive selection of the head of the State Customs Service and its political independence;
introduction of integrity checks and lifestyle monitoring of customs officials (including the possibility to interview officials with the use of a polygraph);
independent audit of customs authorities and updated requirements for employment;
increase in the remuneration of customs officers.

The Law is currently pending signature by the Speaker of the Parliament.