Tax NewsFlash - July 2025

Dear Readers,

In July 2025, the President signed two legislative acts – Law¹ No. 206-VIII dated 14 July 2025 and Law² No. 215-VIII dated 18 July 2025 – introducing changes to the Law On Obligatory Social Health Insurance. Below is a brief overview of the most important, in our view, amendments.

Most of the amendments will take effect on 1 January 2026, except for certain provisions that come into force on 14 September 2025.

• The law introduces a new principle that prioritizes individuals’ self-payment of contributions over participation by the state (new subparagraph 7).
•  It also establishes the principle of balanced participation by the state, employers, and citizens in funding the system (new subparagraph 8).
• The Fund now has the right to reclaim funds from healthcare providers that fail to meet contractual obligations (new subparagraph 9, effective from 14 September 2025).

• Under current legislation, individuals can receive medical care for up to three months after stopping payments. The amendments extend this period to six months for those who have paid contributions regularly for five years (60 months). The obligation to pay for missed months remains.
• The right to choose a healthcare provider is now granted only to individuals whose contributions were paid regularly or who are exempt from payments.

• The Fund will be required to publish quarterly information on revenues and expenditures related to medical services, as well as administrative expenses (effective from 14 September 2025).
• Healthcare providers must provide the Fund with data on their expenditures and return funds in cases of improper fulfillment of contractual obligations (effective from 14 September 2025).

• Currently, state contributions come exclusively from the national budget. The amendments split state contributions between national and local budgets.
• The rate for contributions from the national budget will gradually increase from 2% in 2026 to 4.7% in 2037. The base for calculation remains the same — the average monthly wage from two years prior, as determined by the national statistics authority.
• Local budgets will now cover contributions for registered unemployed individuals and those in difficult life circumstances. The contribution rate is set at 2% of the regional average monthly wage.

• The maximum income for calculating employees’ contributions raised from 10 to 40 times the Minimum Monthly Wage.
• The maximum income for calculating employers’ contributions increased from 10 to 20 times the Minimum Monthly Wage.
• The amendments also clarify the procedure for the calculation of the taxable base for employees’ and employer’s contributions to the Fund.

• The tax authorities will notify a taxpayer of outstanding liabilities only if the debt exceeds six times the Monthly Index Factor.
• The state revenue authorities will suspend operations on a taxpayer’s bank accounts if the debt is not paid within 10 days — regardless of the taxpayer’s risk category.