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On 1 January 2022, Law of Ukraine “On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine on Balancing of Budget Revenues” No. 1914-IX, dated 30 November 2021, (“Law”), entered into force.

Among other things, the Law significantly broadens the powers of tax authorities. Particularly, tax authorities are now entitled to apply to the court in order to impose a temporary restriction on the right of a taxpayer’s executives to travel abroad, provided that the tax debt of such taxpayer exceeds UAH1 million within 240 calendar days.

Furthermore, tax authorities will be able to send requests for information to taxpayers if they discover facts that indicate or merely may indicate such a potential offence.

Other changes introduced by the Law:

  • A minimum tax liability is introduced for users of land plots located outside of residential settlements. The amount of the liability will constitute approximately 4% (5% from 2024) of the normative monetary value of the land plot. If the amount of taxes paid by a land user is less than the amount of minimum tax liability, the land plot user must pay the difference.
  • Large taxpayers can carry forward only 50% of losses reported in the previous year. If the amount of the losses does not exceed 10% of a taxpayer’s financial result, the taxpayer may carry forward all the losses.
  • Distributions from trusts and other unincorporated entities in favour of individual beneficiaries (founders) will be subject to Ukrainian PIT at the reduced rate of 9% (instead of 18%) if certain conditions additionally provided by the Law are met.
  • An individual’s income received from the third and subsequent sales of real estate over the course of one year will be subject to PIT at the rate of 18% (instead of 5%). The amount of taxable income may be reduced by the amount of incurred expenses.
  • Differentiated rent rates for iron ore production are established, which will depend on the market value of ore with higher iron content.
  • Environmental tax rates for air emissions are increased.
  • The pre-tax financial result must be increased by the amount of the non-payable financial aid provided to the unprofitable taxpayer.

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