The Rada registered a draft law on personal investment accounts: Ukrainians are offered tax benefits for investing

The Verkhovna Rada has registered draft law No. 15314, which provides for the creation of a new instrument for citizens to invest in Ukraine – personal investment accounts. The initiative is designed to stimulate the development of the national capital market, attract domestic investments and provide Ukrainians with additional tax incentives for long-term investment.

The document proposes to amend the Tax Code of Ukraine and the Law “On Capital Markets and Organized Commodity Markets”.

What the draft law provides

A personal investment account is defined as a special analytical account in the internal accounting system of an investment firm, which will record the funds of an individual and the results of his investment activities.

The account will be opened for citizens of Ukraine – residents of the state. At the same time, each person will be able to have only one such account, except in cases of changing the investment company.

The draft law proposes to allow monthly deposits of up to 10 thousand euros into the account in the equivalent at the rate of the National Bank of Ukraine.

Where can funds be invested

It is assumed that money from personal investment accounts can be directed exclusively to financial instruments of the Ukrainian capital market.

Among them:

issued securities of Ukrainian issuers;

financial and commodity agricultural notes;

other financial instruments determined by the National Securities and Stock Market Commission.

The authors of the bill emphasize that in this way the state seeks to create additional sources of financing for the Ukrainian economy and support the national investor.

Tax incentives

One of the key innovations is a special taxation regime.

The bill proposes to exempt from taxation income received from investing through personal investment accounts. This includes profits from securities transactions, dividends, interest and other investment income.

However, such a benefit will be valid only on condition that the funds remain in the account for at least 1095 calendar days (three years).

If the investor decides to withdraw funds early or close the account, the income received will be subject to taxation on a general basis.

Strengthening control

The bill also provides for expanding the responsibilities of investment firms.

They will be required to notify tax authorities about:

opening and closing personal investment accounts;
movement of funds and transactions;
annual results of clients’ investment activities.

Automatic exchange of information between investment companies and the tax service is envisaged.

Support for the national investor

The initiators of the bill believe that the introduction of personal investment accounts will allow Ukraine to create a modern mechanism for long-term investment by analogy with similar programs that are already in operation in many countries around the world.

It is expected that the new instrument will contribute to the development of the stock market, increase the financial literacy of the population and attract additional resources to finance the Ukrainian economy.