In the development of Ukraine’s financial market, banks play a crucial role — performing not only traditional credit and financial functions but also actively engaging in stock market operations. They conduct transactions with securities, invest in corporate bonds, government debt instruments, derivatives, and investment funds. Such activities generate additional tax obligations and require specialized approaches to taxation. However, the current tax system does not adequately reflect the specifics of these operations, resulting in several challenges: the absence of unified rules for accounting income and expenses from financial instruments, legal uncertainty regarding derivative transactions, the complexity of tax reporting, and the risks of double taxation in cross-border operations. Transfer pricing within groups of related financial institutions also poses significant fiscal threats. The insufficient adaptation of tax legislation to modern capital market practices reduces the investment attractiveness of the banking sector and hinders its integration into the European financial framework.

Given the dynamic transformation of Ukraine’s financial market and the expanding role of banks as key participants in the stock market, the effective taxation of banking operations has become particularly relevant. The purpose of this study is to identify the main problems and fiscal risks in this area and to develop recommendations for improving tax regulation in line with European standards.

The primary challenges include: the lack of a unified tax accounting methodology; excessive bureaucratization and the absence of digitalized reporting; double taxation in international transactions; insufficient control over transfer pricing; and volatility of tax bases due to currency fluctuations.

To improve regulation, it is proposed to:

• develop a unified tax accounting methodology for securities and derivatives;
• harmonize Ukrainian legislation with EU directives (including BEPS standards);
• automate reporting through electronic tax platforms;
• enhance risk-oriented control of transfer pricing;
• introduce tax incentives for long-term and innovative banking investments.

Harmonization of tax legislation with EU norms, digitalization of reporting, and strengthened control over transfer pricing will reduce fiscal risks, enhance transparency, and improve budgetary stability — thereby fostering the development of Ukraine’s capital market and advancing its European integration. Overall, the comprehensive alignment of Ukraine’s tax policy with European standards will contribute to the establishment of a transparent, stable, and competitive financial environment, supporting sustainable economic growth and facilitating the country’s integration into the EU’s financial and economic system.