Kyiv
EY
19A, Khreschatyk Street
Kyiv 01001 Ukraine
Executive and immigration contacts
Olga Gorbanovskaya
Halyna Khomenko
ey.com/globaltaxguides
+380 (44) 490-3022
Fax: +380 (44) 490-3030
Email: olga.gorbanovskaya@ua.ey.com
+380 (44) 490-3028
Fax: +380 (44) 490-3030
Email: halyna.khomenko@ua.ey.com
At the time of writing, martial law was in force in Ukraine. As such, the Ukrainian tax legislation may change rapidly. As a result, readers should obtain updated information before engaging in transactions.
The exchange rate on 1 January 2025 is UAH42.0295 = USD 1.
A. Income tax
Who is liable. Residents of Ukraine are subject to tax on worldwide income. Individuals who are not tax residents in Ukraine are taxed on their Ukrainian-source income, which includes, among others, the following:
• Income derived from work or services performed in Ukraine
• Income and gains from the disposal of real estate in Ukraine
• Rent from property located in Ukraine
• Dividends paid on shares of Ukrainian companies
An individual is considered to be a tax resident of Ukraine if he or she has a place of abode in Ukraine. If a person has a domicile both in Ukraine and in another country, he or she is considered Ukrainian tax resident if he or she has a permanent place of abode in Ukraine. If he or she has a permanent place of residence in both countries, he or she is considered Ukrainian tax resident if he or she has a center of vital interests (for example, resident relatives) in Ukraine. If a country where the person has a center of his or her vital interests cannot be determined or if a person does not have a permanent place of residence in any country, he or she is considered Ukrainian tax resident if he or she is present in Ukraine for 183 days or more during a tax year (including the day of arrival and the day of departure). For this purpose, the days of presence in Ukraine need not be consecutive.
If it is impossible to determine residency status based on the above, the person is considered to be Ukrainian tax resident if he or she is a citizen of Ukraine.
Notwithstanding the above, the law allows an individual to claim tax residency in Ukraine based on an acknowledgment that Ukraine is his or her main residence or on registration as a selfemployed person in Ukraine.
in kind), less appropriately documented expenses incurred in generating that income.
Exempt income. In addition to the exempt items mentioned above, individuals are exempt from personal income tax on the following types of income:
• Tax refunds as well as payments from state social security and pension funds
• Insurance proceeds, except for long-term life (long-life insurance contracts are those that have a duration of five years or more and that provide for an insurance payment as a lump sum or annuity if certain conditions are satisfied) and non-state pension insurance (subject to certain limitations)
• Income received from entrepreneurial activities by an individual who pays tax under the simplified system of taxation
• Certain income in the form of financial aid received by persons who suffered from the Russian invasion
Taxation of employer-provided stock options. Ukrainian law contains no specific rules for the taxation of stock option plans. Consequently, taxation of such options is based on general principles. Because of the broad definition of income, a risk of taxation of an option at the moment of grant exists. The position of the Ukrainian tax authorities on this matter is unclear, but it appears that this risk is remote. As a result, options are likely to be taxed at the moment of exercise.
The difference between the option exercise price and the fair market value of the shares on the date of exercise is considered to be taxable income to the employee. This income is subject to tax at a rate of 18%.
On the sale of the shares in Ukraine, the employee derives a taxable capital gain, which is equal to the difference between the sale price and the purchase price. Income from the sale of shares is taxed in the same manner and at the same rate as the employee’s other compensation income. The capital gain is not taxable if it falls within the capital gains exemption described in Capital gains. In addition, if shares are received as a gift or inheritance, the taxable amount on sale is decreased by the amount of personal income tax and state duty (the current maximum rate of the state duty is 1%).
Certain limits on the transfer of funds abroad (including the purchase of the underlying shares) apply to Ukrainian currency control residents. Currently, the annual limit is EUR200,000. Currency control residents are defined as individuals (citizens of Ukraine, foreigners and stateless persons) who permanently reside in Ukraine, including individuals temporarily staying outside Ukraine. Additional currency control restrictions are in place during martial law.
Income from alienation of movable and immovable property. Income derived from sales of property is subject to tax at the rates described in Rates, but certain exemptions and special rules apply.
Income derived from sale of a car, motorcycle or motor bicycle in Ukraine is exempt from tax if only one such sale is performed in a reporting year.
Income derived from the sale of immovable property (for example, residency house, apartment or single room) in Ukraine, with the simultaneous sale of a land plot on which the property is located, if any, or from the sale of a land plot (subject to certain limitations) is exempt from tax if a seller has owned the respective immovable property for more than three years or inherited it and if only one such sale is performed in a reporting year.
Capital gains. A capital gain is usually calculated as the difference between proceeds derived by a taxpayer from investment assets and expenses incurred in connection with the acquisition of such property.
Capital gains derived from the alienation of investment assets, such as securities and other corporate rights, are included in taxable income to the extent that the investment income exceeds the amount of UAH4,240 as of 1 January 2025. If the alienation of the investment assets results in a loss, such loss can be deducted against gains derived from the alienation of investment assets during the tax year, subject to certain limitations. Such loss can be carried forward to future years without limitation.
An individual who receives income from the alienation of investment assets must record the results of the transactions separately from other income and expenses and report such results in the annual tax return. However, if the individual performs transactions regarding investment assets with the involvement of a securities broker in accordance with an agreement with the broker, the broker may be considered a tax agent of the individual.
Deductions. Taxable salary income received from a Ukrainian employer may be reduced by the social tax benefit, which varies from one-half to two subsistence minimums for the employee as of 1 January of the reporting year (starting 1 January 2025, the subsistence minimum in Ukraine equals UAH3,028), depending on the status of the individual (categories include single parents, parents of handicapped children, widowers, certain war veterans, disabled persons, Chernobyl victims and others).
A Ukrainian tax resident who has a Tax Identification Code may apply for a tax discount by deducting from salary income the sum of certain amounts paid to Ukrainian residents during the tax year. The following amounts may be included in the tax discount:
• Payments for the education of the individual and his or her immediate family members, subject to certain restrictions
• Payments for medical assistance provided to an individual and his or her immediate family members, subject to certain restrictions (this measure will take effect in the year following the year when the Law of Ukraine on Mandatory Medical Insurance enters into effect)
• A portion of interest paid by an individual with respect to a mortgage
• Cost of charitable gifts made by a taxpayer in an amount of up to 4% of his or her annual taxable income
• Long-term life insurance premiums and contributions paid by the taxpayer for himself or herself or his or her immediate family (subject to certain limitations) to the respective Ukrainian resident entities (insurance companies)
• Private pension insurance contributions made by the taxpayer for himself or herself or his or her immediate family (with certain restrictions) to the respective Ukrainian resident entities (non-state pension funds and banking establishments)
• Payments for artificial insemination, with certain restrictions
• Payments for state services related to the adoption of a child
• Payments for equipment that allows a taxpayer’s vehicle to use biofuel
• Expenses incurred on the building or purchase of accommodation that is classified as affordable
• Expenses incurred on the renting of housing by an internally displaced person
• Expenses incurred on the purchase of shares (or other equity rights), issued by a resident of Diia City
The total amount of the tax discount may not exceed the total amount of taxable salary income received by an individual during the tax year. In addition, any amount of the tax discount that is not used as a result of this restriction may not be carried back or forward.
To claim the tax discount, a taxpayer must file his or her tax return by the end of the tax year following the reporting year. All relevant expenses incurred must be properly documented with receipts and bills. Based on the tax return, the tax authorities allow the tax discount and refund any excess tax paid not later than 60 days after receipt of the tax return.
Rates. Flat income tax rates of 0%, 5%, 9% and 18% are imposed on individuals in Ukraine. The rates vary according to the type of income.
Income derived from the alienation of real estate is taxed at a rate of 0%, 5% or 18% depending on the following:
• Duration of ownership of such property
• The frequency of alienations
• Type of property
• Tax residence status
In general, an 18% tax rate applies to most types of income of resident and nonresident individuals (employment and nonemployment), except for the types of income described below.
An 18% tax rate applies to royalties, investment income and interest income received by resident and nonresident individuals in Ukraine. A 9% tax rate applies to dividends received by individuals from nonresident companies, collective-investment institutions and economic agents that are not payers of corporate profit tax. A 5% tax rate applies to dividends received from resident companies.
Gifts and inheritances received are treated as income and are subject to personal income tax at rates of 0%, 5% or 18%. The applicable rate for inheritances depends on the residency status of the testator and inheritor and on the degree of relation between the testator and inheritor. The applicable rate for gifts depends on the giver (that is, if a giver is a legal entity or an individual registered as a private entrepreneur, the applicable rate is 18%; if a giver is a private individual who is not an entrepreneur, the rate
Ukraine has entered into new double tax treaties with the following jurisdictions.
Algeria Indonesia Poland
Armenia Ireland Portugal
Austria Israel Qatar
Azerbaijan Italy Romania
Belgium Jordan Saudi Arabia
Brazil Kazakhstan Singapore
Bulgaria Korea (South) Slovak Republic
Canada Kuwait Slovenia
China Mainland Kyrgyzstan
South Africa
Croatia Latvia Sweden
Cuba Lebanon Switzerland
Cyprus Libya Tajikistan
Czech Republic Lithuania Thailand
Denmark Luxembourg Türkiye
Egypt Malaysia Turkmenistan
Estonia Malta
United Arab
Finland Mexico Emirates
France Moldova
Georgia Mongolia
United Kingdom
United States
Germany Morocco Uzbekistan
Greece Netherlands Vietnam
Hungary North Macedonia Yugoslavia
Iceland Norway (former)*
India Pakistan
* This treaty applies to Montenegro and Serbia.
F. Temporary visas
Entry visas may be obtained from Ukrainian embassies or consular offices before arrival in Ukraine. Ukraine issues transit, short-term (for up to 90 days of stay in Ukraine in a 180-day period) and long-term (for those foreigners who submit the documents for work or living in Ukraine) visas.
Individuals may travel to Ukraine without visas if they are citizens of Albania, Andorra, Antigua and Barbuda, Argentina, Armenia, Australia, Azerbaijan, Bahrain, Bosnia and Herzegovina, Brazil, Brunei Darussalam, Canada, Chile, Colombia, Dominica, Ecuador, European Union (EU) Member States, Georgia, Grenada, the Hong Kong Special Administrative Region (SAR), Iceland, Israel, Japan, Kazakhstan, Kyrgyzstan, Korea (South), Kuwait, Liechtenstein, Marshall Islands, Moldova, Monaco, Mongolia, Montenegro, New Zealand, North Macedonia, Norway, Oman, Panama, Paraguay, Peru, Qatar, Saudi Arabia, St. Kitts and Nevis, St. Vincent and the Grenadines, San Marino, Serbia, Switzerland, Tajikistan, Türkiye, the United Arab Emirates, the United States, the United Kingdom, Uruguay, Uzbekistan or Vatican City, and if the duration of the stay does not exceed 90 days in a 180-day period, with certain exceptions (up to 30 days in a 60-day period for citizens of Bosnia and Herzegovina; up to 30 days for citizens of Brunei Darussalam; up to 14 days for citizens of the Hong Kong SAR). Visitors from other jurisdictions need to obtain entry visas.
childbirth, caring for a sick family member, registration of heritage, applying for an immigration permit or Ukrainian citizenship, performance of the duties of a foreign correspondent or representative of the foreign mass media).
If a foreign citizen’s employer has obtained a work permit for the individual, a temporary residence permit must be obtained from the Ukrainian immigration authorities in order for the foreign citizen to have a right to stay in Ukraine for the period of the work permit’s validity (usually up to one year) and to travel freely to and from the country. An individual can begin the procedure for obtaining a temporary residence permit only if he or she obtains a D-type visa at a consular office outside Ukraine, with exceptions for certain Commonwealth of Independent States (CIS) countries.
A foreign citizen must submit the following documents with the Ukrainian immigration authorities:
• Application for a temporary residence permit
• Obligation from the employer (a document stating that in case of termination of the employment relationship with the foreign employee, the company has the obligation and takes responsibility for informing the Ukrainian immigration authorities of that fact)
• Notarized translation of the first page of the foreign citizen’s passport
• Foreign citizen’s original passport
• Foreign citizen’s Ukrainian work permit (in cases in which the employment of a foreigner does not require the obtaining of a work permit, the employment contract should be submitted)
• Medical insurance certificate
• Receipt confirming payment of the statutory fee
The temporary residence permit application process may take up to 15 working days.
On obtaining a temporary residence permit, a foreign citizen should be registered at his or her place of residence in Ukraine.
I. Family and personal considerations
Family members. The working spouse of a work permit holder does not automatically receive a work permit. An application must be filed independently. The spouse and children are allowed to stay in Ukraine under the family reunion grounds and accordingly obtain their own temporary residence permits (separately for spouse and for each child notwithstanding the age). Like the holder of the work permit, the D-type visa should be first obtained at a consular office outside Ukraine.
Marital property regime. A joint ownership regime applies to legally married couples in Ukraine. The regime is mandatory and applies to property acquired during marriage. Property owned by an individual before marriage, as well as property obtained during marriage by gift or inheritance, remains separate property. Separate property must be clearly identified when the couple first becomes subject to the joint ownership regime.
Although the law is silent on the marital domicile, Ukraine acknowledges marriages contracted in foreign countries.