Families of fallen soldiers explained whether they need to pay taxes on aid

Monetary assistance paid by a military unit to families of fallen servicemen within the limits prescribed by law is not subject to personal income tax and military levy. This was recalled by the State Tax Service of Ukraine.

The matter concerns assistance to family members of servicemen who died, went missing, or died while performing official duties.

According to Cabinet of Ministers Resolution No. 829, military formations, the State Special Transport Service, and the State Special Communications Service provide families and parents of fallen servicemen with assistance for funeral arrangements and also compensate expenses for ritual services and installation of tombstones.

The set amount of such assistance is five subsistence minimums per person, determined by law as of the date of the serviceman's death.

The STS explained that Article 165 of the Tax Code excludes from the total monthly or annual taxable income monetary assistance provided in accordance with the law to family members of fallen servicemen.

Therefore, no personal income tax or military levy is payable on the amount provided by the state.

When taxes may still be charged

Separate rules apply if a military unit additionally reimburses funeral expenses, ritual services, or tombstone installation beyond the statutory amount of assistance.

Such additional compensation is included in the recipient's total taxable income and is subject to taxation on general grounds. Thus, the tax regime depends on whether the payment is statutory assistance or additional compensation beyond the established amount.

The STS advises considering the purpose of the payment and the basis on which it is provided, as this determines whether taxes are payable.

Based on materials from: State Tax Service of Ukraine