Ukraine’s Parliament Extends 50% Bank Profit Tax in 2027

Key Facts

Ukraine’s parliament approved at first reading a bill extending the 50% corporate profit tax on banks through 2027, instead of raising the rate again for now. A total of 265 lawmakers backed the bill in principle on October 27, 2026, while one abstained and 38 did not take part in the vote. The proposal would keep the elevated rate already in effect in 2026 for an additional year, if the bill completes its legislative process. Parliament also voted 253 to shorten the time allowed to prepare the bill for its second reading. The text aims to extend the tax on banks’ profits while retaining accounting restrictions on the calculation of previous losses.

During the proposed extension, the bill would prevent banks from reducing their pre-tax financial result by the amount of losses incurred in earlier periods. The text thus combines continuation of the 50% rate with limits on using those losses to reduce the taxable financial base. Bill No. 15262 was registered on May 20, 2026, and introduced by lawmaker Danylo Hetmantsev and other members of parliament. After its registration, it proceeded to the parliamentary vote that approved it in principle in October. The extension still needs to pass the second reading before it can take effect for the proposed period. According to the Budget Committee, its adoption could increase central and local budget revenues in 2027 and 2028.

The vote follows a dispute among official bodies over the bill: the National Bank of Ukraine told the parliamentary committee it did not support it, while the Finance Ministry said it backed the measure. The central bank warned that applying a high 50% tax rate to banks’ profits in 2026 could harm the sector’s resilience and lending activity. It also linked the same rate to risks for investment appeal and the prospects for privatizing state-owned banks. The warning puts continuation of the rate in 2027 against a trade-off between the revenues expected by the Budget Committee and the concerns raised by the regulator about the sector’s ability to support lending and investment. The first-reading vote did not resolve the disagreement between the central bank and the Finance Ministry.

National Bank data show that the banking sector posted a return on equity of 26% in 2025, when the tax rate was 50%. The return at non-state-owned banks was 19% over the same period. In that year, banks recorded net profit of 126.8 billion hryvnia, up 39.4% year on year. But profits were not evenly distributed throughout the year: the sector recorded just 7.3 billion hryvnia in the fourth quarter of 2025. The figures show that the sector ended the year with strong annual profits, alongside a decline in profits in the final quarter. The return and profit data provide context for the debate over extending the tax, but do not change the fact that the proposal would continue the rate in effect in 2026 into the following year.

The next legislative step is to prepare the bill for its second reading, after lawmakers approved shortening the time required to do so. That process allows the text’s provisions, including the ban on deducting losses from earlier periods, to be reviewed before the parliamentary vote is completed. If the bill is approved, the Budget Committee expects central and local budget revenues to increase in 2027 and 2028. The National Bank’s warning concerns the tax’s continued impact on sector resilience, lending, investment appeal and the prospects for privatizing state-owned banks. The proposed rate remains 50% for 2027, while final approval remains pending completion of the second reading.