Zelensky Cancels Tax Increases: What Will Change for Entrepreneurs

President of Ukraine Volodymyr Zelensky signed bill No. 9319, which provides for the cancellation of tax increases "retroactively" for individual entrepreneurs (IEPs). This initiative was an important step in supporting small businesses and residents of the special legal regime "Diya.City".

The text of the bill states that it makes adjustments to the taxation of remuneration for gig contracts for residents of "Diya.City". In particular, for startups, the norm on mandatory compliance with the preferential personal income tax rate (PIT) of 5% and the minimum single social contribution (MSC) for specialists is canceled if the number of such employees in the company is less than nine people. This innovation is aimed at stimulating the development of young companies in the field of technology.

In addition, the bill introduced a number of important changes that affect tax policy. In particular, the date of implementation of new taxes for individual entrepreneurs and legal entities using a single tax was postponed from October 1, 2024 to January 1, 2025. This decision will allow businesses to better prepare for innovations.

Particular attention is paid to the extractive industries. In particular, the document provides for a reduction in the rent rate for kaolin extraction. This initiative is aimed at supporting the extractive industry and attracting investment in the sector.

Another important change was the temporary exemption of entrepreneurs from fines for failure to submit reports on controlled foreign companies (CFCs) until the end of martial law. Such a step will allow businesses to focus on adapting to the difficult conditions caused by the war.

However, it should be noted that these changes do not apply to banking institutions. Previously established taxation rules continue to apply to them. The government hopes that the adopted decisions will help stabilize the economic situation and stimulate the development of entrepreneurship in Ukraine.