Tax rates in Ukraine

Company Tax

18%

Tax Rate For Foreign Companies

Foreign companies are taxed on all their revenue from Ukrainian sources, and on their profits obtained from a permanent representation in Ukraine.
A withholding tax applies to the majority of income payments for non-residents, at a rate of 15%.

Capital Gains Taxation

Capital gains are treated as ordinary income and taxed at the standard corporate tax rate.

Main Allowable Deductions and Tax Credits

Most expenses incurred relative to the activities of the company are deductible for tax purposes. Assets with a value greater than UAH 20,000 and a useful life of more than one year are subject to depreciation. Depreciation is determined monthly based on different depreciation calculation methods (linear, decreasing, variable, exceptional). Goodwill cannot be amortised for tax purposes.

Organisational and start-up expenses are fully deductible and are not subject to a cap. Interest is also deductible (restrictions apply to interest paid to non-residents) as are fines and penalties (except for those paid to companies that do not pay corporation tax or are subject to a 0% tax rate). Taxes, with the exception of corporation tax, withholding taxes and non-recoverable VAT, are deductible. The obligatory Ukrainian social security insurance contributions paid by employers are deductible. R&D expenses are also deductible.

Donations to charities are only deductible up to 70% and are capped at 4% of the previous year's taxable income. This rate is raised to 8% for donations to NGOs involved in sports and physical culture. Following the introduction of martial law, the scope of recipients eligible for charitable assistance has been expanded, and the limitation on the deductibility of costs has been adjusted. The added recipients include the Ukrainian armed forces, other military units formed under Ukrainian laws, the Ministry of Internal Affairs, a central executive power body responsible for civil defence, state/communal health protection institutions, and local health protection authorities. Additionally, the deduction limit of 4% of the previous year's taxable profit does not apply to specific goods and services provided for free to non-profit organizations. These goods and services include special personal protective equipment (helmets, body armour), technical observation devices, medicines and medical devices, personal hygiene products, food, and other items, as determined by the Cabinet of Ministers of Ukraine.

Tax losses can be carried forward without any restrictions; however, large taxpayers may utilise only up to half of accumulated tax losses from previous tax years in their current tax return. The carryback of losses is not permitted.

Resident companies would increase the taxable basis for corporate income tax by 30% of the value of goods, works and services sold to residents of low-tax jurisdictions and foreign companies having special legal forms.

Other Corporate Taxes

Owners of residential and non-residential property are subject to local real estate tax. Legal entities that own residential or non-residential real estate are subject to tax at a rate of up to 1.5% of one minimum salary as of 1 January of the reporting year per square meter owned. Land tax is imposed on the owner/user at rates that go up to 12% for legal entities (depending on the category, location, and the existence of a state valuation for each particular land plot). In light of the implementation of martial law, there will be no assessment or payment of real estate tax for the following categories: (i) real estate located in areas affected by ongoing or previous military operations, (ii) real estate temporarily occupied by Russian armed units, and (iii) residential real estate rendered uninhabitable due to the military aggression by the Russian Federation against Ukraine.

Social security contributions payable by the employer amount to 22% of the salary and are capped at 15 times the minimum monthly salary (minimum UAH 1,474 and maximum UAH 22,110 per month as of 1 January 2023).
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.

Other Domestic Resources

State Tax Service of Ukraine

Tax Rate

Allowable Deductions and Tax Credits

There are deductions for Ukrainian mortgage expenses, donations to qualified charities (up to 4% of the taxpayer's taxable income, increased to 16% from 2022), tuition fees paid to Ukrainian universities and contributions to voluntary life/pension insurance (only for tax residents receiving employment remuneration in Ukraine, limited to UAH 3,760 per month per taxpayer as of 2023).

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.

Special Expatriate Tax Regime

The personal income tax for both Ukrainian and foreign nationals varies depending on their tax residency status. Ukrainian tax residents are subject to personal income taxation on their worldwide income, whereas non-residents are only subject to taxation on the Ukrainian-sourced portion of their income (defined as employment income from a Ukrainian entity/business or personal income received from Ukraine).
The same tax rates generally apply to tax residents and non-residents.