Ukraine: Business Environment
Enterprises in the aircraft industry in Ukraine may benefit from temporary corporate income tax exemptions. Incentives are also available for entities founded by public institutions for disabled people. Companies engaged in green tariff power supply activities can use the cash method for corporate income tax determination until 2024. A special tax regime, "Diia City," exists for IT companies and tech start-ups. Diia City residents can choose between the standard corporate income tax regime with an 18% rate on adjusted profits or a special regime with a 9% tax on certain payments (e.g., dividends). Additionally, a reduced 5% individual income tax rate applies to salaries of Diia City employees, gig specialists, and remuneration for work under service agreements and transfer of rights to such works.
Salary or similar employment compensation paid to an employee is subject to a unified social security contribution at a rate of 22%. The remuneration for these purposes is capped at 15 times the minimum wage, which was UAH 8,000 per month as of 1 April 2024.
A mandatory pension fund contribution applies to certain transactions at rates of 1% for land/buildings, 3%/4%/5% for vehicle purchases, 10% for the governmental plate mark on jewellery, and 7.5% for the usage of mobile services.
State duty is imposed on the transfer of real estate and vehicles. A local transport tax of UAH 25,000 is charged on owners of passenger cars with an average market value exceeding 375 minimal salaries (i.e. UAH 2,512,500 for 2023) and less than five years old.
Companies that discharge contaminants into the environment or dispose of waste are subject to an environmental tax, whose rate varies according to the level of contamination. Companies engaged in extracting mineral resources are subject to specific taxation.
Further taxes may be levied at the discretion of the local authorities.
Ukraine | Eastern Europe & Central Asia | United States | Germany | |
Number of Payments of Taxes per Year | 5.0 | 13.9 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 327.5 | 226.2 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 45.2 | 36.5 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Personal income tax | Flat rate of 18% (the value of benefits-in-kind is enhanced by a coefficient of 1.2% for tax purposes) |
Additional tax on individuals as military contribution | 1.5% of taxable income |
Dividends paid by residents | 5% |
Dividends paid by non-residents, mutual investment funds, and non-payers of CIT in Ukraine | 9% |
In general, amounts not deducted from the income of the reporting year cannot be carried forward, and all expenses should be properly documented.
Private entrepreneurs registered under the general tax regime may deduct business expenses and depreciation charges under the general tax regime.
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Latest Update: November 2024