Ukraine
Corporate taxes and other direct taxes
The standard CIT rate of 18% applies to the worldwide income of resident companies. The CIT rate for banks is 50% in 2023, reduced to 25% starting from 2024.
Non-resident companies and their permanent establishments (PE) pay CIT on income received from Ukrainian sources.
Taxable profit is calculated as financial profit before tax (reported in the P&L statement according to GAAP or IFRS), adjusted with certain tax adjustments (depreciation, accruals and provisions, thin capitalization, tax losses, etc.).
Thin capitalization rules apply to loans granted by any non-resident (the debt-to-equity ratio is 3:5), with exceptions for certain financial and leasing entities.
Tax losses can be carried forward indefinitely with limitations for large taxpayers. Loss carry back is not permitted.
Companies with annual income below UAH 40 million (approx. EUR 963K) are entitled not to apply any tax adjustments (except for tax losses carried forward).
A 15% withholding tax (WHT) is imposed on passive income (dividends, interest, royalties) paid to non-residents.
Payment for services is WHT-exempt (except for engineering). WHT is also levied on other payments to non-residents, e.g. constructive dividends, alienation of shares in Ukrainian asset-rich companies, freight, etc.
A lower WHT rate or exemption may apply under a double tax treaty (DTT). Ukraine has a wide DTT network (more than 70). A "look-through approach" is available. The application of DTT benefits is restricted by a "principal purpose test".
Transfer pricing (TP) rules apply to controlled transactions (CT) with related non-residents and with non-related foreign companies registered in low-tax jurisdictions or not paying income tax. TP rules apply if the company's annual revenue exceeds UAH 150 million (approx. EUR 3.6 million), and its CT with the same counterparty exceed UAH 10 million (approx. EUR 241 K). Transactions between non-resident and its PE fall under TP control if the amount exceeds UAH 10 million.
Undistributed profits of controlled foreign companies are taxed at 18% at the level of Ukrainian company or individual (subject to exemptions).
Non-residents operating in Ukraine through PE should register with the tax authorities and file their CPT returns.
Sole traders, companies with annual income below UAH 8.3 million (approx. EUR 199 K), and agricultural producers may apply for the simplified taxation system.
A special beneficial tax regime called DiiaCity is available for IT companies and start-ups.
Level of attention paid by Tax Authority:
VAT and other indirect taxes
As a non-EU member, Ukraine has not implemented EU VAT Directives.
The standard VAT rate is 20% (14% for the import of some agricultural products; 7% for the supply of pharmaceuticals and some services; 0% for the export of goods and the import of certain goods and services).
The VAT registration threshold is a revenue of UAH 1 million (approx. EUR 24 K) over 12 consecutive months. Voluntary registration is available.
Under the general rule, the place of the supply of services is the place where the supplier is registered. However, there are some exceptions (e.g. for consulting, marketing, information services, software development, etc.). The reverse-charge mechanism applies to services provided by a non-resident.
A so-called "Google tax" of 20% is imposed on the provision of electronic services by non-residents to individuals within the customs territory of Ukraine.
Ukrainian VAT is administrated through an electronic system. The taxpayer is entitled to issue VAT invoices for the amount within a certain cap.
There are VAT exemptions (tobacco products, gold) and temporary VAT incentives for the supply of certain goods and services (electric vehicles, scrap metals, equipment for renewable energy, etc.). Until the end of martial law, the import of certain military goods is exempt from VAT. VAT exemptions and incentives are granted under certain requirements.
| VAT options in Ukraine |
Applicable / limits |
| Distance selling |
 |
| Call-off stock |
|
| VAT group registration |
|
| Cash accounting - yearly amount in EUR (approx.)* |
 |
| Import VAT deferment |
|
| Local reverse charge |
Imported services |
| Option for taxation |
| - letting of real estate |
|
| - supply of used real estate |
|
| VAT registration threshold* |
Revenue of UAH 1 million (approx. EUR 26 K) over 12 consecutive months |
Personal income tax / Social security system
The flat PIT rate of 18% is imposed on both active income (e.g. employment, benefits in kind) and passive income (e.g. interest, royalties, investment income) for residents and non-residents.
Ukraine tax residents pay PIT on their worldwide income. Non-residents pay PIT on their Ukrainian sourced income.
Dividends are subject to 9% PIT, except for dividends distributed by Ukrainian CIT payers, which are subject to 5% PIT. For the specific types of passive income, the tax rates of 5% and 0% may apply.
There is a temporary military levy (until the completion of the military reform) at a rate of 1.5% that applies to all income subject to PIT.
During martial law, the income and gains of combatants and individuals living in combat areas received from charitable organizations are PIT-exempt. Also, financial support provided to law enforcement officers and military personnel is not subject to a military levy.
A reduced PIT rate of 5% applies to salaries of individuals employed by DiiaCity, to the remuneration of gig-experts, and to the remuneration of authors.
Most forms of active income fall under the scope of social security contribution (SSC) with an employer’s contribution of 22%; there is no employee’s contribution. The minimum monthly SSC is UAH 1,562 (approx. EUR 38), the maximum monthly SSC is UAH 23,430 (approx. EUR 564).
Wage related taxes
in Ukraine |
Minimum wage |
Average wage in private sector |
| Exchange rate UAH/EUR |
in EUR |
in UAH |
in EUR |
in UAH |
| 41.54 |
171 |
7,100 |
525 |
21,809 |
| Total wage cost |
209 |
122% |
629 |
122% |
| Social contribution tax |
38 |
22% |
116 |
22% |
| Gross salary |
171 |
100% |
525 |
100% |
| Personal income tax |
31 |
18% |
95 |
18% |
| Military tax |
3 |
2% |
8 |
2% |
| Net salary |
138 |
80% |
423 |
80% |