What military tax do mobilized persons pay: the STS answered a common question
Income in the form of average earnings paid by the employer to a mobilized employee while retaining their job position is subject to military tax at a rate of 5%. This explanation was provided by specialists of the Main Department of the State Tax Service in the Chernivtsi region.
Which incomes are subject to taxation
The State Tax Service reminded that according to the Tax Code of Ukraine, the object of military tax is income defined by Article 163 of the Tax Code. These include, in particular, the total monthly (annual) taxable income, income from sources in Ukraine that are finally taxed at the time of accrual or payment, as well as foreign income.
Taxation of individuals' income is regulated by Section IV of the Tax Code of Ukraine. The object of taxation for residents is the total monthly or annual taxable income.
The list of incomes included in such income is defined by Article 164 of the Tax Code. It includes, in particular, other incomes except those exempt from taxation according to Article 165 of the Code.
A tax agent who accrues or pays taxable income to an individual is obliged to withhold tax from the amount of such income at the rate established by the Tax Code.
What guarantees do mobilized employees have
According to part three of Article 119 of the Labor Code of Ukraine, employees sent for basic military service, called up for military service during mobilization, or accepted for military service under contract in case of a crisis situation or martial law retain their job position and workplace.
Such servicemen are paid monetary allowance from the funds of the State Budget of Ukraine in accordance with the Law of Ukraine "On Social and Legal Protection of Servicemen and Their Families."
What military tax rate applies
The Tax Code provides for two different military tax rates.
A 5% rate applies to the income of military tax payers that are taxable objects according to the Tax Code.
At the same time, a 1.5% rate is established for servicemen and employees of the Armed Forces of Ukraine, Security Service of Ukraine, Foreign Intelligence Service of Ukraine, Main Intelligence Directorate of the Ministry of Defense of Ukraine, National Guard of Ukraine, State Border Guard Service of Ukraine, State Protection Service of Ukraine, State Special Communications and Information Protection Service of Ukraine, State Special Transport Service of Ukraine, and other military formations established according to the laws of Ukraine regarding income in the form of monetary allowance, monetary rewards, and other payments provided by law.
The State Tax Service noted that if an employer accrues income to a mobilized employee in the form of average earnings, such income is included in the total monthly (annual) taxable income of the individual and is subject to military tax at a rate of 5%.
Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, pages on Facebook and Instagram to stay informed about the most important events.
