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The future of the Ukrainian Tax Code

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The Committee on Tax and Customs Policy of the Verkhovna Rada of Ukraine recommends the Parliament to adopt the government bill №3688 on amendments to the Tax Code. The bill provides for amendments, which should become the basis of the state budget 2016.

The bill №3688 “On ensuring the balance of the budget revenues in 2016” stipulates the unified social tax (UST) at the level of 22% and a cancellation of the 3.6% UST withheld from employees’ wages.

The document also provides for increasing of the maximum withholding tax base amount from 17 to 25 minimum monthly wages (about 33.4 thousand UAH).

Moreover, as part of a profit tax of natural persons it was proposed to establish a uniform basic rate of 18% instead of the two existing rates of 15% and 20%, while the dividend rate remains 5%.

As part of the simplified tax system, the bill contains a provision related to an annual income decrease for the payers of group III from 20 million UAH to 5 million UAH with an increase of interest rates from 2% to 3% for VAT payers, and from 4% to 5% for non-payers of VAT.

In addition, it was proposed to increase by 1.8 times the rate for single tax payers of group IV (agricultural enterprises) through cancellation in 2016 of the index coefficient of land normative monetary valuation.

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