The tax on income from deposits is not new, it was introduced back in 2014. But depositors still express dissatisfaction with this tax, Ukr.Media reports.
Especially now, when since the beginning of 2025, an updated rate of 23% has been in effect in Ukraine (in accordance with the Law of Ukraine No. 4015-IX, which entered into force on November 28, 2024), of which 18% is personal income tax (PIT) and 5% is military levy.
The exception is military personnel and employees of certain state institutions (ASU, SSU, SZRU, GUR, SBSU, State Special Communications Service, State Special Transport Service, National Guard and UDO), for whom the military fee rate remains 1.5%, subject to submission of relevant documents to the bank.
To make it clearer, here is a simple example. If you deposit 100 thousand hryvnias at 16% per annum, the bank will charge you 16 thousand hryvnias in income. After paying taxes, you will have about 12,320 hryvnias left on hand — exactly the amount you will actually receive.
By the way, many people save money not only for savings, but also to live entirely on interest and not work. How realistic this is is a separate interesting question that we have already considered: How much should you deposit in a bank to live on interest and not work?
I spoke with a manager at one of the banks, who kindly shared the indignation of depositors. And, it's worth saying, the complaints sound familiar – people are still confused about what exactly is taxed and whether the state is really “taking” their savings.
“I've been saving this money for years, and now they're taking taxes out of it”
This emotional remark fails to take into account one important point.
The tax is not on the deposit itself, but only on the income that the bank paid to the depositor. That is, the savings themselves are not taxed, and therefore their amount does not decrease.
“If you deposit 100 thousand hryvnias and the bank accrues 10 thousand hryvnias of income every year, only these 10 thousand are taxed, and the accumulated 100 thousand itself remains untouched.”
This is how almost all income works: when you rent out an apartment, tax is paid not on the value of the apartment, but on the rent.
“When I received my salary, I already paid the tax, and now they are taking it a second time”
And here the explanation is similar. The salary you deposited into the account is not taxed a second time. Tax is paid only on the “new” income – interest on the deposit.
Here's an analogy with business:
“If you earned money, bought real estate with it, and rented it out, the rental income is also taxed, even if the original money was already taxed.”
“Banks make money on my money, they invest my savings, and I pay the tax”
This is fair — banks do use deposits to make money. Without deposits, banks would not be able to issue loans. Banks give part of their profits to depositors — they pay interest on deposits.
Banks pay their income tax on the profits they make. And the deposit tax applies to the income that the depositor receives.
“A bank can issue a loan at 20%, and pay the depositor 10% – the difference covers the bank's expenses, risks and profit. You pay tax only on your guaranteed 10%.”
“Why isn't inflation taken into account when calculating taxes?”
Frankly, this remark is a bit surprising — why should inflation be taken into account? But what is interesting is that to some extent inflation does affect the size of the tax base.
“If inflation is 10% and your deposit yields 8%, real purchasing power decreases, but the law only takes into account nominal profit, not real benefit.”
“Why did we introduce a tax on deposits, but other countries don't have one?”
Indeed, in many countries there is no separate tax on interest income from deposits. This income is simply counted along with a person's other income.
“In most developed countries, interest taxation is not an exception, but a part of general income taxation. The mechanisms are simply different: somewhere the bank automatically withholds it, somewhere the citizen declares it himself.”
This is how it works in the US, for example. There, banks send depositors a written notice every year if the income on the deposit exceeds $10. But even if the amount of income is less, it is still included in the citizen's total income and may be subject to tax.
“In Germany, the bank automatically withholds tax from income on deposits, in the US, income is declared by the citizen. In Italy, there is a fixed rate for passive income.”
Some countries have special taxes similar to our tax on deposit income. And the rates there can be much stricter. For example, in the UK, for relatively small incomes, the rate is 20%, and if the income exceeds 150 thousand pounds, it is 45%.
“Many countries have low or almost zero deposit rates, so the tax issue is less painful than in countries with high rates.”
In my opinion, the main reason for dissatisfaction with the tax on deposit income is that it was not there, and then it appeared. Of course, no one likes to have to pay where they did not have to pay before.
But, I am sure, people will gradually get used to it, and when opening a deposit, they will immediately estimate how much income they will receive after paying taxes.
Importantly
This material is for informational purposes only. It does not constitute financial, tax or legal advice. Legislation is subject to change, so we recommend that you consult a qualified professional before making any decisions regarding your deposits or taxes.
