Corporate profits tax rate is increased for banks and applies starting from financial results for 2023

Recently the Law of Ukraine "On Amendments to the Tax Code of Ukraine on the Specifics of Taxation of Banks and Other Taxpayers" No. 3474-IX, which was adopted by the Verkhovna Rada of Ukraine on November 21, 2023, came into force. The Law increases taxation of banks' profits. The Law also aims to regulate the issues related to application of VAT and excise tax to the sale of goods confiscated within the criminal procedure (though the respective amendments to the customs legislation have not been introduced yet). 

The main provisions of the Law are the following:

• temporarily, based on the results of the tax year 2023 the corporate profits tax (“CPT”) rate is 50 percent for the banks, including in case of the advanced CPT payments
• the banks cannot utilise their tax losses carried forward from the past periods in 2023. This limitation applies to the 2023 reporting period only. The mechanism for further utilisation of such tax losses in the tax periods starting from 2024 is ambiguous
• starting from 2024 the CPT  rate for the banks is increased to 25 percent (previously - 18). 

We will continue monitoring the developments on the matter.