On April 7, 2026, the Verkhovna Rada of Ukraine adopted Law No. 15110, extending the application of the military levy. The law preserves the current taxation rules during martial law and for three years after its termination or cancellation.
The decision aims to ensure stable financing of the security and defense sector while maintaining fiscal predictability for businesses and individuals.
Key provisions of the law
The law stipulates that the military levy at current rates will remain in force for three years following the year in which martial law ends.
This approach establishes a long-term financial framework to support:
1) national defense capabilities;
2) post-war recovery;
3) fulfillment of Ukraine’s international obligations.
According to the Ministry of Finance, the measure is expected to generate approximately UAH 140 billion annually for the state budget.
Military levy rates in 2026
The law maintains existing rates for different taxpayer categories:
Individuals:
- 5% on income;
- 1.5% for military personnel and employees of the security and defense sector (applied to monetary allowances, except exempt income).
Individual entrepreneurs (simplified tax system, Groups 1, 2, and 4):
– 10% of the minimum wage установленої на 1 January of the reporting year.
Single tax payers (Group 3 – individuals and legal entities):
– 1% of income.
Targeted use of funds
Revenues from the military levy will be allocated to the special fund of the State Budget of Ukraine and used exclusively to finance the needs of the Armed Forces of Ukraine.
This enhances transparency and targeted budgeting.
Practical implications for business
The extension of the military levy means:
- no changes in the tax burden in the medium term;
- the need to factor the levy into post-war financial planning;
- continuity in accounting and reporting approaches.
Companies should assess the impact on cash flows and tax models, particularly in combination with other tax changes.
Within its tax advisory practice, Kreston Ukraine supports businesses in adapting to legislative changes and minimizing tax risks.
International commitments
The adoption of the law forms part of Ukraine’s commitments to international partners, including cooperation with the IMF.
Maintaining the military levy demonstrates fiscal stability and responsibility in the post-war period.
Conclusion
The extension of the military levy is a strategic decision that ensures continued financial support for the defense sector while providing predictable conditions for taxpayers.
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This material has been prepared by Kreston Ukraine, an international audit and consulting firm specializing in tax advisory, accounting, and tax audit support.
The information is based on current Ukrainian legislation and prevailing tax practice.
