Saturday, March 12, saw publication of an act on assistance for Ukrainian nationals in connection with armed conflict in the Ukrainian territory. Among other things, the new law regulates the taxation of support granted by businesses in connection with the war in Ukraine.
Tax deductions
Under the new law, deductions through tax costs will be available for the manufacturing cost or purchase price of things, rights and the money’s worth of charge-free supplies provided for mitigation of the consequences of the war in Ukraine to the Government Strategic Reserves Agency, local authorities, entities carrying out healthcare activities or providing emergency medical services, or public service organisations.
Donations to be deducted from net income
Existing law already allows corporate income tax payers to make deductions from their net income for cash donations (gifts) for public service organisations. This applies also to donations in connection with the war in Ukraine. However, the deduction is capped at 10% of total net income.
Assistance for individuals
The new law does not offer deductions for donations for individuals, whether through tax-deductible costs or through deduction from net income.
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