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Taxation in Ukraine
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Taxation in Ukraine

Corporate Tax

Main rate: 25%

Resident companies are taxed on worldwide income; non-resident companies are taxed on Ukrainian-source income only. Companies established under Ukrainian law are considered to be resident for tax purposes. Tax is charged at a rate of 25%. A dividend tax is payable when dividends are distributed, and this is creditable against corporate income tax. Dividends paid between resident companies are therefore effectively not taxed. Special rules apply to the computation of profits of banks and insurers. The Resolution of the Cabinet of Ministers #913, dated September 14th 2005, proposed to reduce the rate of corporate income tax to 23% in 2007, and then by 1% each year until it reaches 20%.

Individual Tax

Flat rate of 13%

Resident individuals are taxed on their worldwide income; non-residents pay tax on Ukrainian-source income only. A person who has permanent residence in Ukraine is considered to be resident for tax purposes, and if the person has permanent residence in more than one country, the centre of vital interests is considered to be the place of residence. Where the person does not have permanent residence in any country, presence in Ukraine for 183 days in a tax year determines tax residence. Tax is charged at a flat rate of 13%, which is levied by withholding from dividends from resident companies and some other income. Tax on business income of individuals is collected by self-assessment.

Capital Gains

Gains are taxed as income

Capital gains of companies are taxed as income. Capital gains of individuals from shares and securities are generally taxed by withholding at 13%. Gains from the sale of Ukrainian state securities are exempt. Capital gains of individuals in respect of immovable property are exempt from income tax until January 1st 2006.

Starting from January 1st 2006, gains of individuals on immovable property that was acquired after January 1st 2004 are reduced by 10% for each year that the property was held, apart from the first year, and will be taxed at a rate of 13%.

Gains by individuals on immovable property with an area of less than 100 sq metres, that was acquired before January 1st 2004, is taxed at a rate of 1%. However, if the area of immovable property is greater than 100 sq metres, the gain is taxed at a rate of 5%.

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