Are families of deceased military personnel taxed on one-time assistance: clarification from the State Tax Service

Amidst the ongoing military conflict, the issue of financial support for the families of deceased military personnel remains one of the most pressing and socially significant. The State Tax Service of Ukraine (STS) has issued an official clarification regarding the taxation of one-time assistance provided to the relatives of soldiers who died while performing combat duties. According to the agency's position, this payment is not subject to either personal income tax or the military levy, allowing families to receive the funds in full.

Tax immunity for assistance to families of the deceased

The key news for military families is the confirmation that one-time assistance, granted on the basis of laws, presidential decrees, or government resolutions, is fully excluded from the taxable base. This means that 18% personal income tax (PIT) and 5% military levy are not withheld from the payment amount. The Tax Code of Ukraine excludes such funds from a person's total annual income, so they are not taken into account when calculating tax liabilities.

It is important to note that the benefit applies exclusively to payments that have the official status of state assistance. Simple money transfers from third parties or charitable collections not processed through state mechanisms do not fall under this rule and may be taxed in the general order.

Procedure for declaring and receiving funds

Families of deceased military personnel are exempt from the need to declare the receipt of one-time assistance. If the recipient has no other income subject to declaration (for example, from the sale of property or renting out real estate), submitting an annual tax declaration solely based on the receipt of assistance is not required. This simplifies the administrative procedure and allows them to focus on resolving other life issues.

In the event that a person had other income subject to declaration during the year, they report according to general rules; however, the assistance amount of 15 million hryvnias does not affect the tax burden on other income items.

Payments for burial and related expenses

In addition to the main one-time assistance, there is a separate payment for burial and reimbursement of related expenses. It is regulated by the Resolution of the Cabinet of Ministers of Ukraine dated May 22, 2000, No. 829. Within the size established by law, this amount is also free from PIT and the military levy. However, any additional payments or expense reimbursements exceeding the preferential amount may be taxed on general grounds. Therefore, it is critically important to clearly understand on the basis of which document a particular payment is accrued.

Mechanism for the 15 million hryvnia payment

In the event of a soldier's death while performing combat duties, their family is entitled to one-time assistance in the amount of 15 million hryvnias. Last year, the Ministry of Defense of Ukraine updated the procedure for its payment: the family immediately receives 3 million hryvnias, and the remaining 12 million are paid out gradually over 80 months — approximately 150,000 hryvnias monthly. Such a mechanism allows for long-term financial support for the family and avoids receiving a large lump sum that could be quickly spent.