December 31 The last day for submitting reports on Controlling Foreign Companies for previous years. Therefore, in accordance with the Tax Code of Ukraine, all controllers are obliged to annually prepare and submit reports on CFCs by electronic means in electronic form in accordance with the current legislation on electronic document flow. The controller must prepare, approved by the order of the Ministry of Finance of Ukraine dated 25.08.2022 No. 254, the Report on CFCs and additional materials on the financial history of companies in the form of annexes to the Report.
And, in accordance with Article 120 of the Tax Code of Ukraine regarding penalties, in case of failure by the controller to submit the Report on CFC in the proper form, such controller shall be fined in the amount of 100 amounts of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year. And in case of untimely submission of the Report on CFC, a fine shall be imposed in the amount of one amount of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year, for each calendar day of failure to submit, but not more than 50 amounts of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year.
However, we would like to emphasize that in accordance with Law No. 3706-IX, any penalties specified in Article 120 of the Tax Code of Ukraine for CFC controllers will not be applied during the entire period of martial law and six months after the end of martial law. Of course, such a privilege does not exempt taxpayers from the obligation to submit a CFC Report.
On December 1, the Cabinet of Ministers of Ukraine decided to cancel the licensing of certain types of agricultural products, including grains, legumes, oilseeds, and oil. This decision was adopted on November 29, 2024.
According to a representative of the Ministry of Economy, the goal of abolishing licensing is to simplify the conditions for doing business for exporters and avoid misunderstandings during customs clearance. Licensing of exports of wheat, corn, sunflower seeds and rapeseed to Bulgaria, Romania, Slovakia, Hungary and Poland will remain unchanged.
Introduction of an export guarantee regime, which provides for:
-export of goods only by registered VAT payers;
-setting minimum export prices;
-electronic exchange of information between the NBU, the State Tax Service and the State Customs Service;
-Features of preparing a tax invoice.
On December 30, the Joint Representative Body of Representative All-Ukrainian Trade Union Associations published the text of the Labor Code of Ukraine, revised by the Ministry of Economy.
In accordance with the text of the updated labor legislation, the following changes are proposed to be added to the existing code:
- Regulation of the conclusion of written employment contracts.
- Determining the signs of employment relationships.
- Improving the conditions for granting vacations.
- New approaches to resolving labor disputes through mediation.
- Introduction of a system for preventing industrial risks to improve occupational safety.
The adoption of this code in its updated version aims to:
- Creation of new jobs and increase in salaries.
- Simplification of hiring through various employment contracts (short-term, seasonal, student).
- Balancing the interests of the parties to the employment relationship.
- Protection of employee rights and stability of labor relations.
- Simplification of procedures for concluding and terminating employment contracts.
- Guarantees of safe working conditions and protection against unjustified dismissal.
- Compliance with international standards (ILO conventions, EU directives).
- Modernization of mechanisms for resolving collective labor disputes, including labor arbitration and mediation.
This code, if adopted, will enter into force on January 1, 2026, but not earlier than the day following its publication.
From January 1, 2025, Law No. 4113 on amendments to the Tax Code of Ukraine will come into force, in particular regarding clarification of the collection of military tax, payment of taxes by residents of Diia City, and other changes.
Thus, Law No. 4113 is an update of the previous version of Law No. 4015-IX, which had certain conflicts in the implementation of the planned deadlines for taxation of individual income.
The key aspects of the amendments to the tax code include the following:
·Postponement of the introduction of military service for most individual entrepreneurs until January 1, 2025.
·Introduction of benefits for individual entrepreneurs registered in temporarily occupied territories or areas of hostilities.
·Exemption from paying military duty for mobilized individual entrepreneurs.
·Individual entrepreneurs of groups 1 and 2 without employees may not pay military service for 1 month per year (during vacation) and in case of temporary incapacity for work for more than 30 days.
·The military tax rate increases from 1.5% to 5% for income received from January 1, 2025.
·Possibility of including military service when calculating the minimum tax liability for individual entrepreneurs.
·Exclusion of e-residents from paying military duty.
Important: These changes apply only to individual entrepreneurs who pay taxes for themselves. All other individuals and employees pay military tax on income at a rate of 5%, starting from December 1, 2024.
Penalties for failure to pay military duty for individual entrepreneurs.
·For groups 1,2,4 of the simplified taxation system, a penalty of 50% of the military levy rate has been established.
·For group 3 of the simplified taxation system, a fine of 5% of the repaid debt amount (if the payment of military duty is delayed by up to 30 calendar days) or 10% of the repaid debt amount (if the payment of military duty is delayed by more than 30 calendar days) has been established.
Military levy rates set for 2025.
1.Individuals – 5% of income.
2.Individual entrepreneurs of groups 1, 2, 4 – 10% of the minimum wage established on January 1 of the reporting year.
3.Individual entrepreneurs of group 3 – 1% of income.
December 17 Verkhovna Rada adopted draft law No. 9083, which provides for the deregulation and de-shadowing of the used car market.
According to the text of the bill, mandatory state registration of used cars by trading organizations is canceled, even if they purchase them for further resale.
Removal of mandatory registration: Dealers are no longer required to register purchased vehicles in their name. Vehicles are now registered directly in the name of end consumers.
Simplification of the registration process: to sell used cars, it is enough to conclude only two contracts - with the previous owner and the end buyer. There is no need for numerous certificates and additional registrations. This will contribute to increasing the transparency and legality of the market, as well as reducing tax risks for business, which is extremely important in modern conditions.
The changes oblige vehicle owners to register their vehicles within ten days of purchase or the occurrence of circumstances to change registration documents. Business entities that trade in cars are exempt from the mandatory registration of vehicles purchased for further sale. Registration with encumbrances is carried out with the consent of the encumbrancer, whose signature must be notarized.
On December 17, the Verkhovna Rada adopted in the first reading No. Bill 11469 on multiple citizenship.
According to the explanatory note:
-Cases of admissibility of multiple citizenship will be determined and a new principle will be introduced - "the legal regime of simultaneous belonging of a citizen of Ukraine to the citizenship of two or more states."
-The ground for losing Ukrainian citizenship due to voluntary acquisition of citizenship of another state after reaching the age of majority is abolished. Instead, a new ground is proposed: loss of citizenship upon acquisition of citizenship of an aggressor state or a state not included in the list for simplified acquisition.
-The categories of foreigners who can acquire Ukrainian citizenship in a simplified manner by submitting a declaration recognizing themselves as a citizen of Ukraine only are determined.
-Preparation and development of a list of countries for simplified acquisition of citizenship, which is currently not determined.
-A new definition of "continuous residence in the territory of Ukraine" is proposed.
In addition, the text defines the following provisions regarding the grounds for loss of Ukrainian citizenship, in particular:
1. Loss of citizenship due to voluntary acquisition of foreign citizenship:
Citizens of Ukraine who voluntarily acquire citizenship of states recognized as aggressors or occupiers may lose their citizenship. This also applies to cases where the person has reached the age of majority at the time of acquisition.
Not considered voluntary: Some situations, such as acquiring citizenship by birth or adoption, do not fall under the category of voluntary acquisition of citizenship.
2. Use of foreign passports:
A citizen of Ukraine has foreign citizenship and uses a foreign passport on the territory of Ukraine, which may result in a threat to the national security and interests of Ukraine.
3. Providing false information:
Acquisition of citizenship based on false information, forged documents, concealment of data, etc.
4. Military service in occupying countries:
Performing military service under a contract in an aggressor state.
5. Criminal liability:
Prosecution and conviction for crimes relating to national security.
6. Participation in armed aggression against Ukraine:
Direct or indirect participation in an armed conflict on the side of an aggressor country recognized by the Verkhovna Rada of Ukraine.
Importantly, provisions 1, 2, 4 and 6 do not apply if it would result in the person being stateless.
On December 30, the President of Ukraine signed an extension of tax and customs privileges for 2025, for the import of tradeable goods, including drones and components, with zero customs clearance.
1. Amendments to the Customs Code (Law No. 4144-IX): Exemption from customs duties for defense goods.
2. Amendments to the Tax Code (Law No. 4143-IX): Exemption from VAT on imports of defense goods.
Among the main provisions of the adopted laws:
-Duty exemption for ammunition components.
-Continuation of benefits for the import of UAVs and other defense devices.
-Expanding benefits to all types of drones.
-Postponement of the transition to Euro-6 environmental standards until 2027.
-Support for volunteers and philanthropists.
-Benefits for employees of non-profit organizations.
-Continuation of VAT benefits for Ukrainian cinema.
-Cancellation of assessment for used cars.
-Complete fiscalization of the gambling business.
And, in accordance with Article 120 of the Tax Code of Ukraine regarding penalties, in case of failure by the controller to submit the Report on CFC in the proper form, such controller shall be fined in the amount of 100 amounts of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year. And in case of untimely submission of the Report on CFC, a fine shall be imposed in the amount of one amount of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year, for each calendar day of failure to submit, but not more than 50 amounts of the subsistence minimum for an able-bodied person established by law as of January 1 of the tax (reporting) year.
However, we would like to emphasize that in accordance with Law No. 3706-IX, any penalties specified in Article 120 of the Tax Code of Ukraine for CFC controllers will not be applied during the entire period of martial law and six months after the end of martial law. Of course, such a privilege does not exempt taxpayers from the obligation to submit a CFC Report.
On December 1, the Cabinet of Ministers of Ukraine decided to cancel the licensing of certain types of agricultural products, including grains, legumes, oilseeds, and oil. This decision was adopted on November 29, 2024.
According to a representative of the Ministry of Economy, the goal of abolishing licensing is to simplify the conditions for doing business for exporters and avoid misunderstandings during customs clearance. Licensing of exports of wheat, corn, sunflower seeds and rapeseed to Bulgaria, Romania, Slovakia, Hungary and Poland will remain unchanged.
Introduction of an export guarantee regime, which provides for:
-export of goods only by registered VAT payers;
-setting minimum export prices;
-electronic exchange of information between the NBU, the State Tax Service and the State Customs Service;
-Features of preparing a tax invoice.
On December 30, the Joint Representative Body of Representative All-Ukrainian Trade Union Associations published the text of the Labor Code of Ukraine, revised by the Ministry of Economy.
In accordance with the text of the updated labor legislation, the following changes are proposed to be added to the existing code:
- Regulation of the conclusion of written employment contracts.
- Determining the signs of employment relationships.
- Improving the conditions for granting vacations.
- New approaches to resolving labor disputes through mediation.
- Introduction of a system for preventing industrial risks to improve occupational safety.
The adoption of this code in its updated version aims to:
- Creation of new jobs and increase in salaries.
- Simplification of hiring through various employment contracts (short-term, seasonal, student).
- Balancing the interests of the parties to the employment relationship.
- Protection of employee rights and stability of labor relations.
- Simplification of procedures for concluding and terminating employment contracts.
- Guarantees of safe working conditions and protection against unjustified dismissal.
- Compliance with international standards (ILO conventions, EU directives).
- Modernization of mechanisms for resolving collective labor disputes, including labor arbitration and mediation.
This code, if adopted, will enter into force on January 1, 2026, but not earlier than the day following its publication.
From January 1, 2025, Law No. 4113 on amendments to the Tax Code of Ukraine will come into force, in particular regarding clarification of the collection of military tax, payment of taxes by residents of Diia City, and other changes.
Thus, Law No. 4113 is an update of the previous version of Law No. 4015-IX, which had certain conflicts in the implementation of the planned deadlines for taxation of individual income.
The key aspects of the amendments to the tax code include the following:
·Postponement of the introduction of military service for most individual entrepreneurs until January 1, 2025.
·Introduction of benefits for individual entrepreneurs registered in temporarily occupied territories or areas of hostilities.
·Exemption from paying military duty for mobilized individual entrepreneurs.
·Individual entrepreneurs of groups 1 and 2 without employees may not pay military service for 1 month per year (during vacation) and in case of temporary incapacity for work for more than 30 days.
·The military tax rate increases from 1.5% to 5% for income received from January 1, 2025.
·Possibility of including military service when calculating the minimum tax liability for individual entrepreneurs.
·Exclusion of e-residents from paying military duty.
Important: These changes apply only to individual entrepreneurs who pay taxes for themselves. All other individuals and employees pay military tax on income at a rate of 5%, starting from December 1, 2024.
Penalties for failure to pay military duty for individual entrepreneurs.
·For groups 1,2,4 of the simplified taxation system, a penalty of 50% of the military levy rate has been established.
·For group 3 of the simplified taxation system, a fine of 5% of the repaid debt amount (if the payment of military duty is delayed by up to 30 calendar days) or 10% of the repaid debt amount (if the payment of military duty is delayed by more than 30 calendar days) has been established.
Military levy rates set for 2025.
1.Individuals – 5% of income.
2.Individual entrepreneurs of groups 1, 2, 4 – 10% of the minimum wage established on January 1 of the reporting year.
3.Individual entrepreneurs of group 3 – 1% of income.
December 17 Verkhovna Rada adopted draft law No. 9083, which provides for the deregulation and de-shadowing of the used car market.
According to the text of the bill, mandatory state registration of used cars by trading organizations is canceled, even if they purchase them for further resale.
Removal of mandatory registration: Dealers are no longer required to register purchased vehicles in their name. Vehicles are now registered directly in the name of end consumers.
Simplification of the registration process: to sell used cars, it is enough to conclude only two contracts - with the previous owner and the end buyer. There is no need for numerous certificates and additional registrations. This will contribute to increasing the transparency and legality of the market, as well as reducing tax risks for business, which is extremely important in modern conditions.
The changes oblige vehicle owners to register their vehicles within ten days of purchase or the occurrence of circumstances to change registration documents. Business entities that trade in cars are exempt from the mandatory registration of vehicles purchased for further sale. Registration with encumbrances is carried out with the consent of the encumbrancer, whose signature must be notarized.
On December 17, the Verkhovna Rada adopted in the first reading No. Bill 11469 on multiple citizenship.
According to the explanatory note:
-Cases of admissibility of multiple citizenship will be determined and a new principle will be introduced - "the legal regime of simultaneous belonging of a citizen of Ukraine to the citizenship of two or more states."
-The ground for losing Ukrainian citizenship due to voluntary acquisition of citizenship of another state after reaching the age of majority is abolished. Instead, a new ground is proposed: loss of citizenship upon acquisition of citizenship of an aggressor state or a state not included in the list for simplified acquisition.
-The categories of foreigners who can acquire Ukrainian citizenship in a simplified manner by submitting a declaration recognizing themselves as a citizen of Ukraine only are determined.
-Preparation and development of a list of countries for simplified acquisition of citizenship, which is currently not determined.
-A new definition of "continuous residence in the territory of Ukraine" is proposed.
In addition, the text defines the following provisions regarding the grounds for loss of Ukrainian citizenship, in particular:
1. Loss of citizenship due to voluntary acquisition of foreign citizenship:
Citizens of Ukraine who voluntarily acquire citizenship of states recognized as aggressors or occupiers may lose their citizenship. This also applies to cases where the person has reached the age of majority at the time of acquisition.
Not considered voluntary: Some situations, such as acquiring citizenship by birth or adoption, do not fall under the category of voluntary acquisition of citizenship.
2. Use of foreign passports:
A citizen of Ukraine has foreign citizenship and uses a foreign passport on the territory of Ukraine, which may result in a threat to the national security and interests of Ukraine.
3. Providing false information:
Acquisition of citizenship based on false information, forged documents, concealment of data, etc.
4. Military service in occupying countries:
Performing military service under a contract in an aggressor state.
5. Criminal liability:
Prosecution and conviction for crimes relating to national security.
6. Participation in armed aggression against Ukraine:
Direct or indirect participation in an armed conflict on the side of an aggressor country recognized by the Verkhovna Rada of Ukraine.
Importantly, provisions 1, 2, 4 and 6 do not apply if it would result in the person being stateless.
On December 30, the President of Ukraine signed an extension of tax and customs privileges for 2025, for the import of tradeable goods, including drones and components, with zero customs clearance.
1. Amendments to the Customs Code (Law No. 4144-IX): Exemption from customs duties for defense goods.
2. Amendments to the Tax Code (Law No. 4143-IX): Exemption from VAT on imports of defense goods.
Among the main provisions of the adopted laws:
-Duty exemption for ammunition components.
-Continuation of benefits for the import of UAVs and other defense devices.
-Expanding benefits to all types of drones.
-Postponement of the transition to Euro-6 environmental standards until 2027.
-Support for volunteers and philanthropists.
-Benefits for employees of non-profit organizations.
-Continuation of VAT benefits for Ukrainian cinema.
-Cancellation of assessment for used cars.
-Complete fiscalization of the gambling business.
