Taxation of lobbyists’ professional activities requires separate and clear legal regulation — the position of the Ukrainian National Lobbyists Association
Following the entry into force of the Law of Ukraine “On Lobbying,” one of the key issues in the practical application of the new legislation has been the taxation of the professional activities of lobbying entities.
The Ukrainian National Lobbyists Association notes that the tax authorities’ current approach does not provide adequate legal certainty and requires separate legislative regulation.
Today, the tax authorities’ position is essentially that an individual who engages in lobbying activities on a regular basis must register as a sole proprietor and independently choose the appropriate tax system.
At the same time, in cases where such activities are of an occasional nature, the income received is subject to taxation on a general basis—with an 18% personal income tax and a military surtax applied.
At the same time, however, this very approach gives rise to a significant legal conflict.
The tax authorities take the position that lobbying, by its legal nature, is not a business activity. However, at the same time, it is precisely the systematic conduct of such activities that effectively prompts an individual to register as a sole proprietor.
According to UNLA, this situation creates legal uncertainty regarding the status of professional lobbyists and is inconsistent with the logic of establishing a civilized and transparent market for interest representation in Ukraine.
Professional lobbying has already been legally recognized as a distinct type of activity. The next logical step should be to establish a clear taxation model that takes into account the specific nature of the profession and ensures uniform and transparent rules for all lobbying entities.
The Ukrainian National Lobbyists Association believes that the best solution would be to introduce a separate legal framework for taxing the professional activities of lobbyists, similar to the approaches already applied to other categories of self-employed individuals.
This approach will contribute to the development of a legal lobbying market, increase legal certainty, enhance the transparency of lobbying entities’ activities, and ensure effective compliance with the requirements of the Law of Ukraine “On Lobbying.”
The Ukrainian National Lobbyists Association continues to work on drafting proposals to improve legislation in the field of lobbying, particularly with regard to defining the professional status of lobbyists, the rules governing their activities, and the specifics of tax regulation in this area.
