50% Profit Tax for Banks: The Rada is Recommended to Adopt the Bill
The Parliamentary Committee on Finance, Tax and Customs Policy recommended the Verkhovna Rada of Ukraine to adopt as a basis and in full bill No. 15262 on the specifics of taxing bank profits.
The bill proposes to extend the application of the increased corporate profit tax rate of 50% for banks until 2027, with a simultaneous prohibition on reducing the taxable financial result by the amount of losses from previous periods.
According to the Ministry of Finance, if adopted, the bill will allow attracting UAH 50 billion to the consolidated budget based on the tax periods of 2027.
Earlier, the "Judicial and Legal Newspaper" wrote in detail about this bill.
Legislative Initiative
The draft law provides for amendments to paragraph 73 of subsection 4 of section XX "Transitional Provisions" of the Tax Code of Ukraine.
In particular, a base profit tax rate of 50% for banks is established for the tax periods of 2026–2027.
For these two years, banks are deprived of the right to apply subparagraph 140.4.4 of the Tax Code of Ukraine. This means that they cannot reduce the taxable financial result by the amount of negative values from previous years.
Losses incurred by banks from January 1, 2026, to December 31, 2027, will begin to be taken into account to reduce future profits only from January 1, 2028.
Arguments For and Against
The National Bank of Ukraine expressed objections, emphasizing that the banking sector has already exhausted its resilience after paying the extra tax in 2023 and 2024.
Among the main arguments against the continued application of the 50% rate, the National Bank of Ukraine cited the risk of reduced lending to the economy.
The NBU notes that the expected additional fiscal effect for the budget of about UAH 20 billion may result in a loss of UAH 200–300 billion of potential credit resources in the future. The regulator explains this by the fact that profit remains the main source of bank capitalization, as dividend payments are limited for most institutions.
The National Bank also emphasizes that unlike in 2023, the current profit of the banking sector is mainly formed through market mechanisms — lending and operations with government bonds. At the same time, the return on equity of banks, according to the NBU, is gradually decreasing — from 59% in 2023 to about 50% in 2025.
Separately, the regulator draws attention to the uneven tax burden. The banking sector already pays profit tax at a rate of 25%, while the base rate for other sectors of the economy is 18%.
According to the NBU, banks provide about 11% of all tax revenues to the budget, although the sector's share in GDP is approximately 2.9%.
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