New income tax rate for financial institutions
Starting from what period do financial institutions (except for insurers) apply the income tax rate of 25% in accordance with clause 136.11 of the TCU?
On 01.12.2024, the Law of Ukraine dated October 10, 2024 No. 4015-IX "On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Ensuring the Balance of Budget Revenues during the Period of Martial Law" (hereinafter - Law No. 4015) came into force, which changed the approaches to taxation of profits of financial institutions (except insurance companies) and revised the income tax rates.
The novelty of Law No. 4015 is, in particular, the definition of the types of income of financial institutions (except for insurance companies) to which the basic (main) income tax rate of 25% instead of 18% applies from 01.01.2025.
The provisions of the new version of clause 136.11 of the TCU, as amended by Law No. 4015 (effective from 01.01.2025), define the types of income by categories of taxpayers to which the basic (main) income tax rate of 25% applies, in particular, in the following cases
taxation of profits of financial institutions (except for insurers), in accordance with the procedure established by subpara. 134.1.1 of the TCU;
taxation of the adjusted profit of a controlled foreign company of a financial institution (except for an insurer), determined in accordance with Article 392 of the TCU;
application of the provisions of clause 57.11 of the TCU for the payment of dividends by a financial institution (except for an insurer).
Relevant clarifications are provided in the Information Letter No. 8/2024 "On Certain Amendments to the Tax Code of Ukraine Introduced by the Law of Ukraine "On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Ensuring Balance of Budget Revenues during the Period of Martial Law", regarding the Introduction of Advance Payments of Corporate Income Tax and Personal Income Tax from Fuel Retail Outlets and Income Taxation of Banks and Other Financial Institutions".