Taxes, transit of Russian gas, auto insurance, and the dissolution of the MSEC: what changes will take effect in Ukraine starting January 1st?

Will the minimum wage increase in 2025?

On January 1, the law "On the State Budget for 2025" will come into effect. The total amount of expenditures that the government plans to implement in 2025 is nearly 4 trillion UAH, more than half of which will go towards financing the security and defense sector. The total revenue that the state plans to collect in 2025 will amount to 2.32 trillion UAH.

The minimum wage in 2025 will not increase and will remain at 8,000 UAH. The subsistence minimum will also remain at the 2024 level:.

• for able-bodied individuals - 3,028 UAH;
• for children under six years old - 2,563 UAH;
• for children aged 6 to 18 years - 3,196 UAH;
• for individuals who have lost their ability to work - 2,361 UAH.

Revising social standards requires enormous expenditures. The head of the Budget Committee of the Verkhovna Rada, Roksolana Pidlasa, explained that raising the minimum wage by 100 UAH would cost the budget 5.3 billion UAH, while increasing the subsistence minimum by 100 UAH would cost 11 billion UAH.

Tax increases

In October 2024, the Verkhovna Rada adopted a law to increase taxes. Some of its provisions took effect on December 1, such as raising the profit tax rate for banks from 25% to 50% for 2024.

Starting next year, the military tax on individual salaries will increase from 1.5% to 5%. This increase will not affect military personnel.

For individual entrepreneurs in the first, second, and fourth groups, a military tax of 10% of the minimum wage (currently 800 UAH) will be introduced. For third-group FOPs, the military tax will be 1% of income.

Additionally, starting January 1, FOPs will be required to pay the Unified Social Contribution (USC). This requirement was suspended in March 2022 and made voluntary during the martial law period.

New transfer limits

On December 10, the largest Ukrainian banks signed a memorandum that tightens control over transactions of certain clients and reduces monthly limits on money transfers from one bank account to another.

The new limits will depend on the risk level of the client and the presence of confirmed sources of income. For high-risk clients without confirmed income sources, banks will set a limit of 50,000 UAH per month (currently, a total limit of 150,000 UAH is in effect).

For other clients without confirmed income sources, different transfer limits will apply:

• from February 1, 2025 - 150,000 UAH per month;
• from June 1, 2025 - 100,000 UAH per month.

The limit can be increased upon client request, but only if the client provides documentary evidence of income sources.

These limits will not apply to clients with confirmed income sources, particularly salary clients of banks, volunteers, and "other clients with confirmed income." For them, the limit on transfers will be set based on their confirmed income.

Update of "auto-civil liability" rules

Starting January 1, 2025, the rules for mandatory auto insurance in Ukraine will change. The changes aim to align Ukrainian legislation with European Union standards.

The new law on "auto-civil liability" provides for a gradual increase in insurance amounts to levels established in EU countries. Thus, from 2025, the limits will increase to 250,000 UAH for property damage (up to a maximum of 1.25 million UAH per event) and to 500,000 UAH for health damage (maximum - 5 million UAH per event).

The franchise (the amount that the culprit must compensate for an accident) will be abolished, while the direct settlement option will become mandatory for all. This means that if the driver of the insured vehicle is not at fault in the accident, their insurance company will compensate for the losses, but will collect the funds from the insurer of the second party - the perpetrator of the accident.

Additionally, the new law provides for free pricing. This means that insurance companies will be able to independently determine the factors affecting the cost of the policy for each driver (for example, driving experience, age, or accident history).

New delivery tariffs from "Ukrposhta"

Starting January 1, 2025, "Ukrposhta" will introduce a new approach to forming delivery tariffs for parcels, which will depend on volume rather than weight. This decision is intended to make tariffs more accessible, convenient, and fairer, claims the CEO of "Ukrposhta," Igor Smeliansky.

The delivery cost will be fixed. It can be determined using standard "Ukrposhta" boxes or the client's own packaging. The lowest tariff will remain unchanged.

Furthermore, in 2025, "Ukrposhta" will raise tariffs for several foreign destinations (such as Israel, Armenia, Kazakhstan, Moldova), but will keep them unchanged for key countries. At the same time, according to the director of the company's international operations department, Yulia Pavlenko, there is an expectation of a decrease in tariffs for the USA and the UK.

Tariffs for EMS shipments (parcels up to 30 kg) to Poland, for letters weighing 1001-2000 grams (by 2 USD), registered letters (up to 3.5 USD), and for small PRIME packages (weighing 1-2 kg) for zones 1 and 3 will increase by an average of 10%.

Suspension of Russian gas transit

Starting at 7 AM on January 1, 2025, the Ukrainian gas transmission system will be able to transport only non-Russian gas. This marks the end of the gas transit agreement.

According to Prime Minister Denys Shmyhal, the resumption of transit will only be possible if Ukraine transports "non-Russian gas" at the request of the European Commission.

At the same time, as the Prime Minister explained, under the Association Agreement with the EU and the Energy Charter Treaty, Ukraine is obliged to ensure the transit of Russian oil to Europe at the request of the European Commission.

Retirement changes

In 2025, the required length of service for retirement under the law "On Mandatory State Pension Insurance" will change. Thus, Ukrainians will be able to retire at age 60 with 32 years of service, at 63 with 22-32 years of service, and at 65 with 15-22 years of service.

If an individual does not have the minimum insurance period by the age of 65, they will not be entitled to an old-age pension. In such a case, the individual will receive social assistance from the state, equal to the subsistence minimum for individuals who have lost their ability to work, which is 2,361 UAH.

Additionally, starting in March 2025, there will be another indexation of all pensions.

Housing rental subsidy for IDPs

At the end of January 2025, a resolution on providing a rental subsidy for internally displaced persons will come into effect. IDPs who have moved to any region controlled by Ukraine will be able to benefit from the housing rental subsidy.

Families renting housing and spending more than 20% of their total income on rent will be eligible for the subsidy. It was previously planned that this threshold would be set at 30% of income.

To qualify for the rental subsidy, there must be a signed rental agreement. The state will compensate the landlord for the tax costs that they must pay on the income received from the