Ukraine plans to levy income and military taxes on captured Russian troops

The Ukrainian government has approved a draft law that introduces personal income tax and a military levy for Russian prisoners of war, according to Taras Melnychuk, the Cabinet of Ministers’ representative in the Verkhovna Rada.

In a post on his Telegram channel, Melnychuk said the Cabinet had endorsed the draft law titled “On Amendments to the Tax Code of Ukraine Regarding the Reflection in Tax Reporting of Amounts of Personal Income Tax and Military Levy Accrued on Remuneration for the Labour of Prisoners of War”, Caliber.Az reports, citing Russian media.

Under the legislation, Russian POWs will be treated as a distinct category of non-resident individuals in Ukraine, in accordance with the 1949 Geneva Conventions and the 1977 Additional Protocols.

Tax collection responsibilities will fall to POW camps, penal institutions, and pre-trial detention centres. These entities will be required to report both the total amount of income accrued by POWs and the amount of taxes withheld. The bill aims to systematise the taxation of earnings within this category and to ensure transparency in financial operations tied to the labour of prisoners of war.

In November of last year, Ukrainian President Volodymyr Zelenskyy signed into law a bill raising tax rates, including an increase in the military levy from 1.5% to 5%, effective January 2025. 

The military levy is applied to income from wages, dividends, profits from the sale of movable and immovable property, rental income, and other similar earnings.

Ukrainian armed forces personnel and members of agencies such as the National Guard, Security Service (SBU), Foreign Intelligence Service, State Border Guard Service, National Police, State Protection Department, and the Ministry of Internal Affairs are exempt from paying the military levy.

By Tamilla Hasanova