On 27 December 2023, the Ukrainian government approved the National Revenue Strategy 2024-2030. The strategy includes several tax reforms, among other things.
The key points of the strategy are as follows:
1. Reform the simplified taxation system to ensure it is utilized by micro and small businesses and not misused by larger businesses for tax advantages. The reforms ensure large companies pay minimum tax and gradually transition to the 18% corporate tax rate over three years.
2. Revising the personal income tax system by reintroducing progressive rates and other adjustments;
3. Reforming various corporate income tax incentives, including amendments to prevent reduced tax rates that may shift tax revenue to other countries under the pillar 2 global minimum tax rules. This includes replacing tax rate incentives with full deduction incentives and limiting benefits to ensure a minimum effective tax rate of 15%;
4. Aligning corporate tax laws with EU regulations on cross-border payments and anti-avoidance measures such as:
- the Parent-Subsidiary Directive (Council Directive 2011/96/EU of 30 November 2011);
- the Interest and Royalties Directive (Council Directive 2003/49/EC of 3 June 2003);
- the Merger Directive (Council Directive 2009/133/EC of 19 October 2009);
- the Anti-Tax Avoidance Directive (Council Directive (EU) 2016/1164 of 12 July 2016).
5. The enforcement of Pillar 1 and Pillar 2 rules;
6. Improving transfer pricing rules based on the latest OECD guidelines;
7. Introducing an excess profits tax for enterprises involved in post-war reconstruction;
8. Addressing issues related to income tax treaties;
9. Finalizing the synthesized texts of tax treaties impacted by the BEPS MLI;
10. Improving mutual agreement procedures.
