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Taxation in Ukraine is governed by the Tax Code of Ukraine. The State Tax Service of Ukraine (STS) and the State Customs Service (SCS) are the main authorities responsible for tax collection and control. They report to the Ministry of Finance of Ukraine, which in turn reports to the Cabinet of Ministers of Ukraine.
Standard rate is 18% for resident and non-resident companies. It applies to resident and non-resident Ukrainian companies’ taxable profit.
Expected to reach 18% by 2023 according to Trading Economics global macro models and analysts’ expectations.
Currently 20%, with reduced rates of 7% and 0% for specific goods and services.
Unless a double-taxation treaty applies, non-resident companies receive Ukraine-sourced income (dividends, interest, capital gains, and royalties) at 15% withholding tax. A Ukrainian resident must pay a 20% WI-FT from its own funds on non-resident marketing and advertising income from Ukraine. Ukrainian companies or their representative offices pay 0%, 4%, or 12% tax on (re)insurance contributions and premiums to non-resident (re)insurers.
Ukrainian legal entities and/or permanent establishments act as tax agents in Ukraine with respect to their employees. Employers withhold 18% for personal income tax and 1.5% of temporary military tax from employee salaries. Employers also pay 22% as the Uniform Social Tax.
No stamp taxes exist, but nominal stamp duty exists for certain actions such as notarizing contracts and court filings. Commodity exchanges and real estate sales incur a 1% stamp duty.
In case, if a foreign investor wants to set up his company in Ukraine, then an establishment suitable to his business or needs is to be chosen. As per Russian Company Law, there are several types of companies available in Ukraine, such as:
The LLC is the most popular and widely used form of business entity in Ukraine. It offers limited liability for shareholders and can be established with a minimum capital requirement.
A JSC is a type of business entity that can be publicly or privately held. It allows for the issuance of shares and raising capital through the stock market. Representative office: A representative office is a non-commercial entity that serves as a local representative of a foreign company. It is not allowed to engage in commercial activities but can perform marketing, research, and liaison functions on behalf of the parent company.
A sole proprietorship is a business owned and operated by a single individual. The owner has unlimited personal liability for the business’s debts and obligations.
General partnerships have unlimited liability, while limited partnerships have limited liability for limited partners. Both types are called “partnerships.
A production cooperative is a legal entity that is formed by individuals who pool their resources and efforts to engage in production or economic activities.
An LLP is a hybrid entity that combines elements of a partnership and an LLC. LLPs in Ukraine provide limited liability protection to owners (participants) and are governed by Ukrainian laws.
A professional partnership is a specialized form of business entity that is typically utilized by professionals, such as lawyers, accountants, and architects.
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Chandrawat & Partners is a prominent full-service firm dedicated to delivering top-tier professional services to clients both within the domestic and international spheres.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
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