Verkhovna Rada wants to grant special status and exempt from personal income tax to employees in combat zones: what the bill proposes

The Verkhovna Rada Committee on Social Policy and Veterans' Rights Protection recommended the parliament to adopt as a basis bill No. 15340, which provides for the introduction of a special status for persons ensuring the livelihood of the population, the functioning of the state, and critical infrastructure in active combat zones.

The purpose of the bill is to create a special legal mechanism for the recognition, protection, and social security of persons who personally work in active combat zones during martial law, ensuring the livelihood of the population, the operation of state bodies, territorial communities, critical infrastructure facilities, and state electronic information resources.

The document proposes:

• to introduce a special wage payment regime for persons working in active combat zones by concluding fixed-term labor contracts with increased pay, additional guarantees, and risk compensations;
• to allow the use of a shift work method to ensure the operation of critically important enterprises, institutions, and services in frontline areas with subsequent rotation of employees, provision of accommodation, transportation, and social protection;
• to establish a special status "participant in ensuring livelihood in active combat zones" for employees who actually and personally perform their work duties under increased danger conditions. The status is proposed to be granted exclusively for personal performance of such functions.

As previously reported by the Judicial and Legal Newspaper, bill No. 15340 was registered in the Verkhovna Rada, proposing to introduce a separate status of participant in ensuring livelihood in active combat zones for employees who actually perform socially important functions in dangerous conditions. 

The bill provides tax guarantees for persons who will be granted the status of participant in ensuring livelihood in active combat zones.

The key idea is the introduction of a tax guarantee that will allow excluding certain payments to employees from taxable income if they:

• actually and personally work in active combat zones;
• perform socially necessary functions (medicine, energy, transport, public administration, utilities, and other services);
• have confirmed periods of such work.

The document provides for the introduction of a tax benefit for persons who receive the status of participant in ensuring livelihood in active combat zones. It is proposed to exempt from personal income tax the wages, salaries, monetary allowances, as well as bonuses, supplements, awards, compensations, incentives, and other payments accrued for periods of actual personal work performed in active combat zones.

This tax benefit can only be used upon documentary confirmation of the special status and work periods. If such documents are not available at the time of income accrual, taxation will be carried out in the general manner. After receiving the necessary confirmation, it is envisaged to recalculate the paid tax.

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