The Verkhovna Rada’s Committee on Finance, Taxation and Customs Policy has recommended approving draft law No. 14097, which proposes the introduction of an increased profit tax rate for banks in 2026. If adopted, banks will pay a 50% profit tax and will not be able to reduce their taxable income by the amount of losses incurred in previous years.
This is reported by Finway
Main Provisions of the Draft Law and Response from Financial Institutions
The document, which is already being prepared for a second reading in parliament, contains two main provisions. Firstly, it concerns a temporary increase in the profit tax for banks to a record 50% for the entire year of 2026. Secondly, it includes a ban on banks reducing their taxable income by the amounts of losses incurred in past periods.
“The fiscal effect of such a measure will be significantly lower than publicly communicated,” but the risks are much higher.
Potential Consequences for the Banking Sector
The decision of the relevant committee contradicts the previous position of the Council for Financial Stability, which includes the leadership of the National Bank of Ukraine and the Ministry of Finance. Experts believe that such changes could limit the credit and investment potential of banks, which is critically important for financing the energy sector and the defense industry. Additionally, the increased tax burden may complicate the process of privatizing state banks and violate Ukraine’s commitments outlined in the Memorandum with the International Monetary Fund.
The National Bank has also noted that the introduction of a 50% profit tax rate may lead to the need for recapitalization of certain state banks due to additional pressure on financial results.