Ukraine International Tax Contacts Baker Tilly 28 Fizkultury street Kyiv 03680, Ukraine T: +380 44 284 1865 www.bakertilly.ua Tax Tatiana Stretovych Head of Tax Practice T: +380 (73) 337-82-07 tatiana.stretovych@bakertilly.ua
Facts and figures as presented are correct as at 01 January 2016. Corporate Income Taxes Resident entities, which are entities incorporated or registered in Ukraine, are generally subject to tax on their worldwide income. Non-resident entities are generally subject to tax on their Ukraine source income, subject to the terms of any relevant tax treaty. The standard corporate income tax rate is 18%. Alternative rates/schemes apply to certain types of businesses, including insurance companies. Qualifying legal entities and individual entrepreneurs may be eligible for a simplified system of taxation. Taxable income must generally include any taxable capital gains. Unutilised losses may generally be carried forward; however, the rules regarding the carry forward of losses may be altered annually. Losses cannot be carried back. Group tax consolidation is not available in Ukraine The tax year is the calendar year. As a general rule a taxpayer files tax returns quarterly. Quarterly tax returns must be submitted during 40 days after the quarter end. Tax is payable within 10 days after the deadline for submitting the tax return. Taxpayers with taxable income in the preceding year that doesn t exceed UAH20m file only an annual return that must be submitted during 60 days after the year-end. Personal Taxes Resident individuals are generally subject to tax on their worldwide income. Non-resident individuals are generally subject to tax on their Ukraine source income, subject to the terms of any relevant tax treaty. Resident and non-resident individuals are generally taxed on income from employment at the rate 18%.
Country Tax Guide Ukraine Taxable income must generally include any taxable capital gains. Certain gains (eg from immovable or movable property) are generally exempt or taxed at the rate of 5%. Other forms of income (dividends, interest, royalties etc) are generally subject to tax at flat rates. Property inherited or received as a gift is generally subject to tax, subject to exemptions (eg for qualifying relatives). There is no wealth tax in Ukraine. Employment Related Costs and Taxes Fringe benefits There is no separate fringe benefits tax. Unless specifically exempt, taxable benefits-in-kind form part of the taxable income of individuals and are subject to personal income tax. Social security costs Employers are generally required to make unified social security contributions in respect of employee gross salary at the rate 22%, Contributions are subject to a maximum of 25 times the monthly minimum wage as established by legislation. The monthly minimum wage is currently UAH1,450 (UAH 1,550 starting from 01/12/2016). Withholding Taxes on Payments Abroad The rates of withholding tax on the following payments made abroad by companies to companies are generally (subject to possible exemptions): Dividends 15 Interest 15 Royalties 15 For payments made to recipients in countries with which Ukraine has a double tax treaty, the rates of withholding tax may be reduced under the terms of the treaty. %
Value Added Tax (VAT) VAT is generally levied on the supply of goods and services in Ukraine, and on the importation of goods. The standard VAT rate is 20%. A reduced rate of 7% applies to certain medicines and medical equipment. A rate of 0% applies to certain supplies, including exports of goods, and certain international transport and spacecraft services. Certain supplies are VAT exempt, including baby food, certain education and healthcare services, and certain financial and insurance services. The VAT registration threshold is VAT turnover exceeding UAH1,000,000 in the previous 12 months. Taxpayers may apply for VAT registration voluntarily if compulsory registration does not apply. Registered traders can generally recover the VAT with which they themselves are charged on their purchases of goods and services, subject to conditions and possible exceptions. Other Taxes Property tax Immovable property, land and certain types of vehicles are subject to property tax. Immovable property (excluding land) is generally subject to tax based on the total area of the property, subject to exemptions. The tax rates are established by local authorities, but may not exceed limits set by legislation. Owners and users of land are generally subject to tax at varying rates, subject to exemptions. Ecological tax Ecological taxes generally apply at varying rates to certain activities, including emissions polluted into the atmosphere from stationary sources, discharges of pollutants directly into water bodies, certain waste disposal, the generation of radioactive waste, and the temporary storage of radioactive waste in excess of permitted limits.
Country Tax Guide Ukraine Rental fees Subsoil use fees apply to the use of mineral resources in Ukraine at varying rates. Excise taxes Excise taxes are imposed on the production and importation of certain goods and transactions, including alcohol, alcoholic beverages, tobacco, petroleum products, motor vehicles, and certain securities and derivative transactions. Single tax Single tax is designated to reduce tax and administrative burden for small businesses, both legal entities and individuals. Rates of the Single tax depend on certain condition and for legal entities varying at 3-5% of the income. Agricultural producers with the share of agricultural production for the previous fiscal year that exceeds 75 % may enjoy favorable tax treatment. The single tax for agricaltural producers provides relatively small tax burden due to its rates which are set up in per cent of the normative value of one hectare of land plots as follows (per annum): a. For plough, hayfield and pastures 0.81 (for mentioned kinds of land owned by entities specialized in growing plants in hothouses 5.4) b. For perennial plantations 0.49 c. For lands of water fund 2.43 In case the land is located in mountain areas and Polissya territories (north of Ukraine), the rates are lowered still further: a. For plough, hayfield and pastures 0.49 b. For perennial plantations 0.16. Millitary contribution The rate is 1.5% of personal income from employment, provisioning of services under civil contracts and lottery prizes. The payers of the military contribution are: Residents who receive Ukrainian sourced income and foreign income; Non-residents who receive Ukrainian sourced income; and Tax agents. The military contribution is levied and paid in accordance with the rules that apply to the personal income tax. Tax Incentives for Businesses Research and development (R&D) expenditure Qualifying R&D expenditure (excluding expenditure subject to depreciation) may be deducted from taxable income.