Key tax changes: what taxpayers can expect in 2026 – lawyer Kostiantyn Nosov.

Domestic taxpayers traditionally look forward to New Year’s presents not only from family and friends, but also from lawmakers. However, for the most part, these presents from the latter are ‘traps’. Consequently, the key changes for 2026 are as follows.

The Law of Ukraine ‘On the State Budget of Ukraine for 2026’ stipulates that, from 1 January 2026, the minimum wage is set at 8,647 UAH, and the subsistence minimum for a person of working age at 3,328 UAH.

Taking these figures into account, the income limits for single tax payers in 2026 will be as follows:

• first group – 1,444,049 UAH;
• second group – 7,211,598 UAH;
• third group – 10,091,049 UAH.

The flat-rate tax for 2026 will be, for the first group, 332.80 UAH (10 per cent of the subsistence minimum as at 1 January 2026), for the second group – 1,729.40 UAH (up to 20 per cent of the wage as at 1 January 2026). We recommend that you check the rates applicable to your group with your local authority, as it may decide to reduce the flat-rate tax rates.

The military levy for single tax payers in the first and second groups will amount to 864.70 UAH (10 per cent of the minimum wage as at 1 January 2026). The Unified Social Contribution (USC) from 1 January 2026 will amount to 1,902.34 UAH.

The average wage for the purposes of social security contributions and criticality in 2026 is 21,617.5 UAH.

Further significant changes to the existing tax collection rules were introduced by the Law of Ukraine ‘On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding the Specifics of Taxing Banks under the Corporate Income Tax in 2026 and the Postponement of the Deadlines for the Implementation of the Electronic System for the Circulation of Alcoholic Beverages, tobacco products and liquids used in electronic cigarettes’ of 3 December 2025 No. 4698-IX, which, for the sake of convenience, we shall hereinafter refer to simply by this number.

Thus, Law No. 4698 repeals, with effect from 1 January 2026, the provision of the Tax Code of Ukraine (hereinafter referred to as the ‘TCU’) which exempted vehicles with electric motors from VAT. From 1 January 2026, VAT will be levied on both the importation of such vehicles into the customs territory of Ukraine and the sale of such vehicles within the customs territory of Ukraine.

From 1 January 2026, single tax payers are prohibited from carrying out security activities. As the Tax Code of Ukraine does not contain a list of activities, specified by KVED code, that fall under the concept of ‘security services’, it is recommended that you seek individual tax advice if you have any doubts as to whether your activities meet the criteria for security services.

The VAT exemption for the importation into Ukraine of UAVs, anti-drone guns, portable UAV detection devices, sights, radio stations, etc., has been extended until 1 January 2027 (a full list of goods is set out in paragraph 9²⁴ of Section XXI ‘Final and Transitional Provisions’ of the Customs Code of Ukraine).

From 1 January 2026, the exemption from the application of paragraph 198.5 of Article 198 and Article 199 of the Tax Code of Ukraine will apply to all transactions exempt from VAT in accordance with sub-paragraphs 4 and 5 of paragraph 32 of Subsection 2 of Section XX of the Tax Code of Ukraine (this paragraph contains a list of so-called defence goods), and not merely to the supply of goods under state contracts (agreements) for defence procurement. In other words, the right not to recognise offsetting tax liabilities and not to adjust the tax credit will no longer be limited to the supply of goods under state contracts for defence procurement.

The tax base for property tax on immovable property other than land plots includes immovable property owned by individuals and situated in areas of active hostilities or temporarily occupied by the Russian Federation. This new provision applies to property for periods from 1 January 2025 until the last day of the month in which hostilities or temporary occupation cease.

The introduction of the electronic system for the circulation of alcoholic beverages, tobacco products and liquids used in electronic cigarettes, as well as the electronic excise duty stamp, is postponed from 1 January to 1 November 2026.

From 1 January 2026, the amount of debt written off in the bankruptcy proceedings of such an individual by court order, provided that such debt exceeds 25 per cent of the minimum wage set as at 1 January of the reporting year. Consequently, the discharge of debt in bankruptcy proceedings is treated as income for the debtor, on which they are obliged to pay personal income tax independently and declare it, whilst the financial institution must reflect this amount in its tax returns.