Ukraine’s Ministry of Finance has launched a public consultation on a draft law to implement EU-aligned anti-tax avoidance rules, including interest deduction limits, exit taxation, GAAR, and hybrid mismatch provisions, inviting businesses, experts, and citizens to submit comments.
Ukraine’s Ministry of Finance (MoF) has launched a public consultation, on 24 February 2026, on the Draft Law “On Amendments to the Tax Code of Ukraine regarding the implementation of rules to counter tax avoidance practices that directly affect the functioning of the internal market of the European Union and Ukraine, in accordance with Council Directive (EU) 2016/1164 of 12 July 2016.”
The draft was prepared with support from the EU4PFM project, the Ministry’s Reform Support Office, OECD experts, and the State Tax Service. It seeks to align Ukrainian tax legislation with EU anti-tax avoidance directives (ATAD I and ATAD II) and fulfil the country’s European integration commitments.
The consultation addresses aggressive tax planning that exploits differences between national tax systems, which can reduce budget revenues, create unfair competition, and undermine trust in the tax system.
Key provisions under consultation include:
- Limitation on interest deduction (Article 4 ATAD): Excessive borrowing costs can only be deducted up to 30% of EBITDA, with non-deducted amounts carried forward, preventing artificial inflation of debt financing.
- Exit tax on capital gains from asset transfers (Article 5 ATAD): Applies to changes in tax residency, relocation of assets or activities abroad, and transfers to foreign permanent establishments, ensuring taxation of value created in Ukraine. Individuals, including sole proprietors, are exempt.
- General anti-abuse rule (GAAR, Article 6 ATAD): Introduces a systemic definition of tax abuse, taxing transactions based on economic substance rather than legal form.
- Elimination of hybrid mismatches (Articles 9, 9a, 9b ATAD): Neutralises situations where differences between tax systems cause double deductions, deductions without corresponding income, or double tax residency, primarily targeting multinational groups.
The consultation is intended to provide greater legal certainty and transparency for businesses, protect the state budget, reduce opportunities for aggressive tax planning, and strengthen alignment with OECD recommendations, supporting Ukraine’s ongoing integration with international tax standards.
The Ministry of Finance has made the draft law and supporting materials available on its website under the “Draft Regulatory Acts” section. Comments and proposals may be submitted in writing to the Ministry at Mezhyhirska Street, 11, Kyiv, or by email to nhorieva@minfin.gov.ua, homut@minfin.gov.ua, tbondarenko@minfin.gov.ua, markevich@minfin.gov.ua, and schubka@minfin.gov.ua.
The Ministry invites businesses, experts, academics, professional associations, and citizens to participate in the consultation.
