Ukraine country tax guide

1. Languages used by the local tax authorities

Ukrainian. Foreign documents must be translated into Ukrainian when provided to the Ukrainian tax authorities.

2. Main corporation tax characteristics

2.1 Corporate tax rate/additional taxes / global aggregate rate

General rate of corporate income tax constitutes 18%. Special rates apply to insurance and gambling.

Corporate wealth tax

There is no corporate wealth tax in Ukraine.

2.2 Specific tax regime for dividends /interest/ capital gains

Dividends are generally exempt from corporate income tax if they originate from the following companies:

  • Ukrainian companies (except for investment funds); and
  • foreign companies in which company owns at least 10% shareholding for at least one calendar year.

Exemption for dividends received/accrued by the foreign company does not apply if such foreign company is registered in the jurisdiction listed by Ukraine as low-tax jurisdiction (except for jurisdictions that have concluded double tax treaty with Ukraine).

Interest income is subject to general 18% corporate income tax. Interest expenses are deductible subject to the following thin capitalisation limitation.

The thin capitalisation rules apply whenever the total cross-border debt of the company exceeds three and a half times (3.5x) the company’s equity. In such case, interest accrued by the company on such cross-border debt is deductible for CIT purposes only in the amount of up to 30% of the company’s taxable profit increased by the total accrued interest and depreciation. The remaining non-deducted portion may be carried forward but is subject to a 5% annual reduction in the residual amount. Thin capitalisation limitation does not apply (i) to companies that conduct exclusively leasing activity, and (ii) to interest accrued under loans from international financial institutions, and (iii) to interest accrued/paid in favour of foreign banks.

Capital gains from the sale of participations in Ukrainian companies or other foreign companies are subject to general 18% corporate income tax. 

2.3 Existence of exempt companies or companies subject to a reduced tax rate

Small enterprises under certain conditions may opt for simplified tax regime allowing them to pay 5% unified tax on gross revenues instead of general corporate income tax. 

Corporate bodies with a charitable, non-profit or religious purpose are exempt from corporate income tax.

Starting from 1 January 2022, certain eligible companies operating in IT sector may opt for special tax regime within the framework of Diya.city regulation (special economic zone for IT business).

Such special tax regime provides for payment of 9% “distribution tax” on repatriation of profits from the company and certain other listed transactions, instead of paying general corporate income tax.

3. Main personal income tax characteristics

3.1 Personal Income Tax rate / additional taxes / global aggregate rate

Subject to applicable double taxation treaties, Ukrainian tax residents are liable to personal income tax on their worldwide income. Other persons are subject to personal income tax if they have income sources in Ukraine. 

General rate of personal income tax is 18%.

The following special rates of personal income tax are available: 

  1. 0% – for inheritance and gifts from immediate family members and certain other types of income as listed in the tax legislation; 
  2. 5% – for dividends from Ukrainian companies payers of corporate income tax, and certain other types of income as listed in the tax legislation, and 
  3. 9% – for dividends from foreign companies and investment funds.

All types of income subject to personal income tax is also subject to military levy at flat 1.5% rate.

3.2 Any mechanism taking into account the family position?

There is no joint taxation regime for married couples or individuals living under a civil union. 

3.3 Specific taxation of dividends / interest / capital gains?

Dividends from Ukrainian companies-payers of corporate income tax are subject to 5% personal income tax. Dividends from other Ukrainian companies (including investment funds and payers of unified tax under simplified regime) and foreign companies are subject to 9% personal income tax. 

Starting from 1 January 2022, dividends from IT companies operating within the framework of Diya.city are exempt from personal income tax under certain conditions.

Other types of passive income, including interest and capital gains, are subject to general 18% tax rate.

Special rules apply to taxation of capital gain from sale of real estate.

3.4 Beneficial regimes

Generally, there is no beneficial tax regime for individuals.

3.5 Personal wealth tax

There is no personal wealth tax in Ukraine.

3.6 Gift and Inheritance tax rates

Gifts and inheritance from immediate family members are subject to 0% personal income tax.

Gifts and inheritance from other individuals, who are not immediate family members, are subject to 5% personal income tax.

Gifts from corporate entities are subject to general 18% personal income tax.

4. Visas and residence permits

4.1 Golden visa or equivalent regime?

Ukraine does not have such a regime.

Capacity to have a residence permit for HNWI?

Residence permit may be granted on the basis of investment in the amount of at least USD 100,000 
or equivalent.

4.3 Ability to travel to the European-Union?

Ukrainian nationals enjoy visa-free regime with Schengen countries.

5. Trusts/foundations/Fiducies/Treuhands/Stiftungen

5.1 Are these vehicles used/recognised in your jurisdiction?

Ukraine has specific regulation only for joint investment vehicles, such as investment funds (including private funds).

5.2 Are these vehicles subject to a disadvantageous tax regime in your jurisdiction?

Investment funds and other joint investment vehicles are subject to beneficial tax regime, whereby their profits from investment activities are exempt from tax.