Tax rates in Ukraine

VAT

Standard rate   20% 

Reduced rate.A 7 % rate applies to pharmaceuticals and healthcare products.

Not taxed by VAT: issues of securities, insurance services, reorganizations of legal entities, transfers and returns of property under operating lease arrangements, currency exchange and imports with a customs value of less than 150 EURO

CORPORATE INCOME TAX

Standard rate  18% 

18% on profit before taxes determined under the rules of national accounting standards (or IFRS if applicable) and adjusted for a list of differences which increase or decrease the profit for the purpose of taxation. Companies with annual net income less than UAH 20 million may choose not to apply adjustments and, hence, they define tax base according to their accounting records.

Reduced rate

Particular types of businesses are (e.g. insurance) the subject to special tax treatment which may provide for lower tax rates.

Special arrangements

Simplified taxation for self-employed persons and companies with turnovers up to UAH 5 million, 3-5 % of gross income depends on field of activity, annual revenue, average salary amount, VAT/Not VAT taxpayer, etc. 

Tax exemptions

Small companies with annual net operating income less than 3 mln. UAH and with average salary paid to employees exceeding 2 minimum wages (7446 UAH) and meet certain criteria are exempt from CIT until 1-st of January 2022

Withholding taxes

Dividends 

Dividends paid by one resident CIT taxpayer  to resident company which is a CIT-payer are exempt of CIT.

Dividends paid by Ukrainian company to another legal entity are subject to advance corporate income tax at regular rate 18%. This advance payment can be later offset against CIT, but not against other taxes. There are specific rules of tax base for advance CIT calculation.

Interest

15% (if accrued to non-resident)

Royalties & Service Fee

15% (if accrued to non-resident). 20% can be applied to some types of income.

Capital gains

Capital gains are treated as ordinary income and taxed under regular corporate income tax rate (18%).

Taxes on workforce

Social contributions for employee - NA

Social contributions for employer

22% social tax, but not less than 819,06 UAH (22% of minimum wage). The tax base is also limited to 55 845 UAH (minimum wage*15).

Personal income tax for employee

18% flat rate and 1,5% of military duty

Personal income tax on capital gains

Real Estate

Income from the first during the year sale of residential property which was owned not less than 3 years is tax-exempt. In other cases the rate is 5%. Some specific conditions apply for inheritance and gifts.

Dividends and interests

Dividends are taxed at 5% (9% if legal entity is not CIT payer)

18% for other passive income.

Land tax

The sales of lands with certain maximum area are tax-exempt.

For other sales of lands the rate is 5%. Some specific conditions apply for inheritance and gifts.

The text above is not tax advice and can be a subject for legislation updates after the publication date. Please contact tax advisors and auditors of Crowe Donoway and Crowe DNW Ukraine.