The law amending Lex Ukraine has already come into effect. Included in this law is an amendment to the Income Tax Measures related to the armed conflict in Ukraine, which introduces changes to income tax that we have summarized for you in this article.
• The law maintains the limit for the deduction of donations from the tax base at 30% for all gifts mentioned in § 15 paragraph 1 and § 20 paragraph 8 of the Income Tax Act for the tax periods of 2024, 2025, and 2026, respectively for tax periods ending by February 28, 2027.
• It extends the possibility of deducting donations from the tax base under § 15 paragraph 1 and § 20 paragraph 8 of the Income Tax Act to include donations provided to Ukraine in the years 2024 to 2026.
• It allows for the application as tax-deductible expenses of non-monetary gifts (e.g., food, medicine) provided in the years 2024, 2025, and 2026 in support of Ukraine, the inhabitants of Ukraine, and legal entities based in Ukraine; however, in such cases, it is no longer possible to deduct this amount from the tax base as a donation.
• It extends the exemption for employee income arising in the form of accommodation provided to them and their family members who left Ukraine due to the war conflict by their employer for the tax periods 2024 to 2026.
• It maintains the exemption of gratuitous income received in the years 2024, 2025, and 2026 for the purpose of supporting Ukraine’s defense efforts.
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