We are closely following the development of Bill No. 11416 “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding Taxation During Martial Law.” It has generated significant excitement and prompted government officials to seek dialogue with businesses and society.

The result of seeking alternatives and compromise was the revised government bill No. 11416-d, which is planned to be brought to the Committee and put to a vote in the Parliament.

Key points of the changes as of yesterday:

• Increase of the military levy rate from 1.5% to 5%;
• Setting a military levy for sole proprietors (FOPs) in the 1st and 2nd groups at 10% of the minimum wage;
• Setting a military levy of 1% for the 3rd group of single tax payers;
• Establishing monthly advance payments for gas stations (with an amended version here).

Newly added provisions:

• Setting the corporate tax rate for banks at 50% for 2024;
• Raising the corporate tax rate for financial companies to 25%;
• Monthly personal income tax reporting. The document does not provide for a 1% turnover tax or an increase in VAT.

“Our Association, as a representative organization of small and medium-sized oil product market operators, was most concerned about the introduction of monthly advance payments for gas stations. The government has not abandoned this idea. So, what is proposed in this part:

1. Taxpayers engaged in retail fuel sales are required to pay advance payments on corporate income tax for each place of retail fuel trade, the information about which is included in the Unified Register of Licensees and Places of Circulation of Fuel (as of the 1st of the current month). This initiative is provided for by Article 141.14 of this Code. In connection with this, Article 137 of the Tax Code of Ukraine (hereinafter referred to as the Code) is proposed to be supplemented with a new paragraph 137.12.
2. Taxpayers engaged in retail fuel sales must pay, no later than the last business day of each month, an advance payment on corporate income tax (this is provided in subparagraph 141.14.1 of paragraph 141.14 of Article 141 of the Code).
3. The amounts of advance payments for gas stations are specified in subparagraph 141.14.2 of paragraph 141.14 of Article 141 of this Code and depend on whether the place of retail fuel trade is involved in the sale of alcoholic beverages and tobacco products,” explains Alina Potapovich, a member of our association’s legal council.

For retail fuel trade locations where no retail trade of alcoholic beverages and/or tobacco products is conducted, the following amounts of advance payment are set: a) 60,000 UAH for each location where one or more types of fuel – motor gasoline, heavy distillates, or liquefied gas – are sold (except when only liquefied gas is sold); b) 30,000 UAH for each location where only liquefied gas is sold.

For retail fuel trade locations where the retail trade of alcoholic beverages and/or tobacco products is conducted (regardless of the business entity holding the license), slightly higher advance payment amounts are provided: a) 80,000 UAH for each location where one or more types of fuel – motor gasoline, heavy distillates, or liquefied gas – are sold (except when only liquefied gas is sold); b) 40,000 UAH for each location where only liquefied gas is sold.

It is important to note that advance payments on corporate income tax made under paragraph 141.14 of the Code are an integral part of the corporate income tax, as stated in subparagraph 141.14.3 of paragraph 141.14 of Article 141 of this Code.

Thus, the amount of advance payments made during the reporting (tax) period reduces the corporate income tax liabilities calculated based on the basic (main) rate (defined by Article 136 of this Code) for the amount that does not exceed the calculated tax liability for the tax (reporting) period.

If the amount of the advance payment made during the reporting (tax) year exceeds the calculated tax liability for that tax (reporting) year, such excess is not carried forward to reduce the tax liabilities of subsequent tax (reporting) periods.

The amount of advance payments on corporate income tax paid cannot be refunded to the taxpayer as overpaid and/or mistakenly paid tax liabilities, cannot be credited against other taxes and fees (mandatory payments), and is not subject to the provisions of Article 43 of this Code.

For failure to pay the agreed amount of advance payments on corporate income tax within the period specified in subparagraph 141.14.1 of paragraph 141.14 of Article 141 of the Code, such taxpayer is liable to a fine in the amounts specified in Article 124 of this Code.

If this bill receives support in the session hall of the Verkhovna Rada of Ukraine, the proposed changes will take effect on October 1, 2024. This will significantly change the conditions for doing business and the lives of small fuel enterprises in the regions.