The European Union plans to attach corporate tax reform conditions to aid to Ukraine

CryptoWorld News: The European Union is considering imposing stricter conditions on its 90 billion euros (approximately $105 billion) loan to Ukraine, linking the disbursement of part of the funds to a highly controversial corporate tax system reform. The plan being discussed by the European Commission will affect 8.4 billion euros of macro-financial assistance expected to be provided to Ukraine this year. The debate centers on adjustments to the preferential tax regime currently available to some Ukrainian businesses. The system was originally designed for sole proprietors and small enterprises, allowing businesses to pay a minimum income tax rate of 5%. Ukraine’s Ministry of Finance and major donors believe the arrangement drags down the wartime budget, distorts competition, and fuels a sizable shadow economy. The proposed tax changes would require companies benefiting from the preferential tax regime, if their annual revenue exceeds 4 million hryvnias, to pay 20% value-added tax. According to Ukraine’s Ministry of Finance estimates, this adjustment would add more than 40 billion hryvnias (about $907 million) to the budget each year.