Ukraine Tax Regime

Ukraine operates a classical corporate income tax system with a standard 18% rate, layered with materially higher rates for financial institutions introduced as part of wartime and post-war fiscal measures, and specific regimes for insurance and gambling activities. The tax system continues to operate under martial-law conditions that have been in force since February 2022, which has affected filing deadlines, certain compliance obligations and the treaty relationships with several neighbouring and historically connected jurisdictions. Ukraine maintains a broad double tax treaty network of around 70 effective conventions, has ratified the OECD/G20 multilateral instrument, and continues incremental alignment with EU and OECD standards as part of its European integration process, while raising financial-sector tax rates significantly to support wartime revenue needs.

1.1 Sources

1.2 Recent developments

From 1 January 2025, the basic CIT rate for financial institutions other than insurance companies rose to 25%, up from the standard 18% rate applicable to most other sectors. For 2026, the temporary CIT rate specifically applicable to banks' profits is set at 50%, a rate introduced to capture windfall wartime profitability in the banking sector and confirmed as continuing for the 2026 tax year. Ukraine denounced its double tax treaties with Russia (effective 2022), Belarus (effective November 2022), and Syria and Iran (2023), removing treaty relief on cross-border flows with those jurisdictions. Ukraine continues to apply the multilateral instrument (ratified 2019) to modify its remaining covered treaties with a principal purpose test and other base erosion and profit shifting (BEPS) measures.

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Rates and residence

Resident entities are subject to corporate income tax (CIT) on worldwide profits earned both in Ukraine and abroad; non-resident entities are taxed on Ukrainian-source income, including profits attributable to a Ukrainian permanent establishment (PE). The standard CIT rate is 18%. Materially higher rates apply to the financial sector: 25% from 1 January 2025 for financial institutions other than insurance companies, and a temporary 50% rate specifically for banks' profits confirmed for 2026. No CIT is levied at the regional or local level, although the simplified (unified) tax operates as a turnover-based alternative to standard CIT for qualifying small and medium businesses (section 2.9).

2.2 Special regimes — insurance and gambling

Insurance companies pay special CIT at 0% or 3% on gross insurance premium income rather than the standard 18% net-profit computation: the 0% rate applies to long-term life insurance premiums, voluntary pension programme premiums and voluntary medical insurance premiums, while the 3% rate applies to other insurance premiums received (excluding reinsurance contributions, premiums and payments); amounts of special CIT paid reduce the insurer's CIT base otherwise subject to the standard 18% rate, avoiding double taxation of the same premium income. Gambling activities are taxed at rates specific to the activity type: lottery organisation is taxed at 30% (raised from 28% in 2020), operation of gambling machines at 10%, and bookmaking and other gambling activities including casinos at 18%; unlike the insurance mechanism, CIT paid on gambling income at the 10% or 18% rates does not reduce the taxpayer's separately computed standard 18% CIT liability on the full amount of taxable profit.

2.3 Dividends and participation

Dividends received by a Ukrainian resident company from another Ukrainian resident company are generally excluded from the recipient's taxable income to avoid cascading taxation within domestic corporate chains, subject to advance dividend tax mechanics at the distributing company (historically requiring an advance CIT payment on distribution, credited against the distributor's own annual CIT liability, with specified exemptions for distributions out of already-taxed profit). Dividends received from foreign subsidiaries are generally included in Ukrainian taxable income with a foreign tax credit for underlying foreign tax paid, subject to treaty relief and to Ukraine's controlled foreign company rules (section 2.7) which can bring foreign subsidiary profits into the Ukrainian tax base even before distribution.

2.4 Income determination and deductions

Taxable profit is computed as accounting financial result before tax (prepared under Ukrainian national accounting standards or IFRS, as applicable) adjusted by statutory tax differences specified in the Tax Code — including adjustments for depreciation, provisions, royalties to related non-residents, and transactions with non-residents in low-tax jurisdictions or with unfavourable legal forms. Taxpayers with annual income below UAH 40 million may elect to compute CIT purely on accounting financial result without most tax-difference adjustments, materially simplifying compliance for smaller taxpayers. Depreciation is computed on a straight-line or other permitted method basis over statutory minimum useful lives that vary by asset class; goodwill is generally not amortisable for tax purposes.

2.5 Interest limitation

Ukraine applies a thin-capitalisation-style interest limitation to interest on debt owed to related non-resident lenders (and certain other specified non-resident and low-tax-jurisdiction lenders): net interest expense on such debt is deductible only up to 30% of tax EBITDA where the debt-to-equity ratio exceeds 3.5:1 (2:1 for financial institutions and leasing companies), with disallowed interest carried forward and deductible in future periods within the same limitation. Interest paid to unrelated third-party lenders on ordinary commercial borrowing is generally deductible without this restriction, subject to general transfer pricing and arm's-length scrutiny.

2.6 Losses

Tax losses may be carried forward without time limitation and offset against future taxable profits, though utilisation can be affected by specific anti-abuse provisions targeting loss trafficking through changes of control lacking business purpose. There is no loss carryback under Ukrainian tax law. Losses computed under the simplified accounting-result basis available to smaller taxpayers (section 2.4) follow the same indefinite carryforward principle.

2.7 Controlled foreign companies

Ukraine applies controlled foreign company (CFC) rules requiring Ukrainian resident individuals and legal entities that control a foreign company (generally more than 50% ownership, or more than 10% together with other Ukrainian residents holding an aggregate of more than 50%, subject to lower thresholds in certain cases) to include the CFC's adjusted profit in their Ukrainian taxable base, subject to statutory exemptions including a de minimis profit threshold, an exemption for CFCs with effective taxation comparable to Ukraine or resident in a treaty jurisdiction with adequate exchange of information, and an exemption where the CFC's income is predominantly active rather than passive. CFC reporting obligations apply annually regardless of whether the exemptions ultimately eliminate the current-year inclusion.

2.8 Transfer pricing

Ukraine's transfer pricing rules apply the arm's-length principle to controlled transactions — cross-border related-party transactions, transactions with residents of low-tax jurisdictions and certain unfavourable legal forms listed by the Cabinet of Ministers, and specified transactions with related Ukrainian parties — above statutory value thresholds (broadly, annual income exceeding UAH 150 million and controlled transaction value exceeding UAH 10 million). In-scope taxpayers must file an annual transfer pricing report and maintain contemporaneous documentation on request, with country-by-country reporting obligations for Ukrainian constituent entities of large multinational groups meeting the consolidated revenue threshold. Advance pricing arrangements are available for large taxpayers on a case-by-case basis.

2.9 Simplified (unified) tax and incentives

Qualifying small and medium businesses may elect into the simplified (unified) tax system, taxing gross turnover rather than net profit at rates that vary by taxpayer group (from roughly 2% to 5% of turnover, with a fixed-amount option for the smallest individual entrepreneurs), in lieu of standard CIT, personal income tax on business income, and in some groups VAT. Diia City — a special legal and tax regime for qualifying technology companies — allows resident entities to elect a reduced 9% withholding-style tax on distributed profit (an exit-capital-style regime) instead of standard 18% CIT, alongside preferential personal taxation for qualifying IT specialists' income. Investment incentives, including customs and profit tax relief, have also been extended to support wartime reconstruction and defence-sector production.

2.10 Pillar Two

Ukraine has not implemented a Pillar Two global minimum tax regime (income inclusion rule, undertaxed profits rule or qualified domestic minimum top-up tax) as of the current tax year. Ukrainian constituent entities of in-scope multinational groups (consolidated revenue of EUR 750 million or more) — including those benefiting from Diia City's reduced distributed-profit tax or other incentive regimes — should monitor exposure to top-up taxation imposed by other jurisdictions in the group structure that have implemented an income inclusion rule or undertaxed profits rule, since Ukraine currently has no domestic minimum top-up tax to absorb that risk itself.

2.11 Branch income and reorganisations

A Ukrainian branch (permanent establishment) of a non-resident company is taxed at the standard 18% CIT rate (or the applicable financial-sector rate) on profits attributable to the PE, computed under the same general rules as a resident company; there is no separate branch profits or remittance tax beyond ordinary dividend withholding if PE profits are formally repatriated as a dividend-equivalent distribution. Domestic reorganisations — mergers, divisions, spin-offs and transformations of legal form — can generally proceed on a tax-neutral basis for CIT purposes where statutory succession conditions are met, with carryover of tax attributes including loss carryforwards, subject to anti-abuse rules addressing reorganisations undertaken principally to obtain a tax benefit such as loss trafficking.

3.1 Residence and rates

An individual is Ukrainian tax resident based on a combination of domicile, permanent residence, centre of vital interests and a 183-day physical presence test, applied hierarchically where multiple criteria could otherwise produce ambiguous results; residents are taxed on worldwide income while non-residents are taxed on Ukrainian-source income only. Employment and most other personal income is taxed at a flat 18% personal income tax (PIT) rate, with a military levy currently set at 5% applying in addition to PIT on most types of income as a wartime measure, giving a combined marginal burden of 23% on most employment income.

3.2 Employment income and payroll

Employment income is subject to 18% PIT plus the 5% military levy, both withheld by the employer at source through payroll, together with a unified social contribution (USC) payable by the employer at 22% of gross salary up to a statutory monthly cap, funding pension and social insurance. Unlike PIT and the military levy, USC is generally an employer-borne cost rather than an employee withholding, materially increasing the total cost of employment above the amount reflected in an employee's net pay.

3.3 Business and investment income

Self-employed individuals and individual entrepreneurs outside the simplified tax system are taxed on business income at 18% PIT plus the 5% military levy; many small entrepreneurs instead elect into the simplified (unified) tax system described in section 2.9, which can substantially reduce the effective rate on turnover. Dividends from Ukrainian resident companies are generally taxed at a reduced 5% PIT rate (9% for dividends from non-resident companies, collective investment institutions or entities not subject to standard CIT), plus the 5% military levy, reflecting partial relief for tax already borne at company level; interest income and most capital gains on securities are taxed at 18% PIT plus the military levy.

3.4 Social contributions

The unified social contribution of 22% is the primary payroll-related social charge, payable by employers on gross employment income up to the statutory cap, funding state pension and social insurance benefits; self-employed individuals under the general system pay USC on a notional or declared income basis, while simplified-system taxpayers pay a reduced or fixed USC amount tied to their simplified tax group. There is no separate employee-side social security withholding beyond PIT and the military levy, distinguishing Ukraine's structure from jurisdictions that split social charges between employer and employee.

3.5 Inbound individuals

Ukraine has no net wealth tax. Inheritance and gift tax rates depend on the relationship between the parties and their residence status: transfers between close relatives are generally taxed at 0%, transfers between other resident individuals at 5%, and transfers involving a non-resident party (as donor, heir or legatee) at 18% plus the 5% military levy. Foreign nationals working in Ukraine should confirm residence status under the domestic tie-breaker hierarchy and any applicable treaty, and should note that Ukraine's denunciation of its treaties with Russia, Belarus, Syria and Iran (section 1.2) removes treaty-based relief for individuals connected with those jurisdictions.

Passive income — dividends, interest, royalties and specified other payments — paid to non-residents from Ukrainian sources is generally subject to withholding tax (WHT) at a domestic statutory rate of 15%, unless a lower rate or exemption is available under an applicable double tax treaty (DTT) and the required documentation (a valid certificate of tax residence and, where relevant, beneficial-ownership confirmation) is provided to the Ukrainian payer. Ukraine maintains around 70 effective double tax treaties, most of which reduce the 15% domestic dividend, interest and royalty rates into the 5–10% range for qualifying recipients, though rates vary materially by treaty and by ownership threshold for reduced dividend rates.

Relief at source under a treaty requires the non-resident recipient to provide the Ukrainian payer with a valid certificate of tax residence issued by the competent authority of the treaty jurisdiction, along with confirmation of beneficial ownership where the treaty or domestic anti-abuse rules require it; absent this documentation, withholding applies at the domestic 15% rate, with refund available on subsequent application within the statutory limitation period. Ukraine applies the multilateral instrument's principal purpose test to its covered treaties, and the denunciation of the Russia, Belarus, Syria and Iran treaties means the domestic 15% rate now applies without treaty mitigation to Ukrainian-source payments to residents of those jurisdictions.

5.1 General anti-abuse and low-tax jurisdiction rules

The Tax Code contains a general anti-avoidance principle (business purpose test) permitting the tax authorities to disregard or recharacterise transactions and structures that lack genuine economic substance and are undertaken principally to obtain a tax benefit. The Cabinet of Ministers maintains a list of low-tax jurisdictions and a separate list of unfavourable legal forms (entities with no or minimal corporate tax and limited disclosure), transactions with which trigger enhanced transfer pricing documentation obligations and, in specified circumstances, additional tax adjustments regardless of whether the counterparty is formally related.

5.2 Exchange of information and disclosure

Ukraine ratified the OECD/G20 multilateral instrument (MLI) in 2019, modifying covered double tax treaties with base erosion and profit shifting measures including a principal purpose test and, for several treaties, an updated permanent establishment definition targeting artificial avoidance of PE status. Ukraine participates in international exchange of information mechanisms and has committed to implementing automatic exchange of financial account information consistent with the OECD Common Reporting Standard, alongside country-by-country reporting exchange for large multinational groups with Ukrainian constituent entities.

6.1 VAT

VAT is levied at a standard rate of 20% on the supply of goods and services in Ukraine and on imports, with a reduced 7% rate for specified pharmaceuticals and medical devices, a 14% rate for certain agricultural products, and zero-rating for exports and international transport. Mandatory VAT registration applies once taxable supplies over the preceding 12 months exceed UAH 1 million; voluntary registration is available below the threshold. VAT returns are filed monthly (quarterly for certain simplified-tax payers), with input VAT recoverable against output VAT for taxable business activity through Ukraine's electronic VAT administration system, which tracks registered tax invoices in real time.

6.2 Excise, customs and other taxes

Excise duties apply to fuel, tobacco, alcohol and motor vehicles at specific rates per unit, with periodic increases tied to wartime revenue needs and EU harmonisation commitments. Import duties apply under Ukraine's customs tariff, substantially liberalised for trade with the EU under the Association Agreement and its Deep and Comprehensive Free Trade Area, alongside continued wartime customs relief for humanitarian and defence-related imports. Land tax and real estate tax on non-land immovable property are levied by local councils within statutory rate bands set relative to the minimum wage or normative monetary valuation. There is no net wealth tax; a one-off voluntary asset declaration and tax compliance programme has been used in recent years to encourage disclosure of previously undeclared assets at preferential rates.

7.1 Filing, assessment and audit

The tax year is the calendar year. Standard CIT returns are filed annually, generally within 60 calendar days after the end of the reporting year, with quarterly reporting required for certain categories of taxpayer (including those with income exceeding the simplified-computation threshold in section 2.4); advance dividend tax and other event-driven filings apply as described in section 2.3. The State Tax Service administers assessment and audit on a risk-based approach, with certain categories of tax audit suspended or modified during the period of martial law; the general statute of limitations is 1,095 days (three years), extended to 2,555 days (seven years) for transfer pricing matters, though wartime legislation has at times paused the running of these periods.

7.2 Rulings, appeals and penalties

Taxpayers may request individual tax consultations from the State Tax Service on the application of tax law to specific facts, providing a measure of protection from penalties (though not from the underlying tax) where a taxpayer relies in good faith on a consultation later found to be incorrect. Assessment disputes are appealable administratively to a higher tax authority and thereafter to the administrative courts, with further appeal to the Supreme Court on points of law; martial-law legislation has modified certain procedural deadlines during the relevant period. Penalties for late filing, late payment and understatement are set as percentages of the tax shortfall, with interest (currently linked to the National Bank discount rate) accruing on overdue amounts.

Martial-law legislation has, at various points since February 2022, extended or modified certain filing and payment deadlines and suspended specific categories of audit; taxpayers should confirm current wartime procedural relief in force for the relevant filing period, as this framework has continued to evolve. Late payment attracts statutory interest in addition to fixed-percentage penalties for the underlying compliance failure.

9.1 Entity choice

The limited liability company (LLC, tovarystvo z obmezhenoiu vidpovidalnistiu) is the standard vehicle for both domestic and foreign investors, with no statutory minimum capital requirement and straightforward incorporation. A joint-stock company suits capital-market ambitions or larger multi-shareholder structures. Branches of foreign companies are permitted and taxed identically to a resident company on attributable profits at the standard 18% rate (or the applicable financial-sector rate), with no separate branch remittance tax; representative offices conducting only non-commercial liaison activities are not subject to CIT on that basis but risk requalification as a taxable PE if commercial activity is in fact carried on.

9.2 Structuring and incentives

Technology businesses should evaluate Diia City status, which replaces standard 18% CIT with a 9% exit-capital-style tax on distributed profit and offers preferential personal taxation for qualifying specialists, materially changing the effective tax profile for businesses that retain rather than distribute profit. Smaller businesses should evaluate the simplified (unified) tax system's turnover-based rates against standard CIT, particularly where margins are thin relative to turnover. Financing structures involving related non-resident lenders should be tested against the thin-capitalisation and 30%-of-EBITDA interest limitation in section 2.5, and groups with foreign subsidiaries should model CFC inclusion risk under section 2.7 even where no distribution is currently planned.

9.3 Worked effective-rate illustration

A Ukrainian LLC (standard CIT regime, non-financial sector) earns EBITDA of UAH 200,000,000, books depreciation of UAH 30,000,000 and net interest expense to an unrelated bank of UAH 15,000,000, fully deductible as the lender is not a related non-resident subject to the thin-capitalisation limitation. Taxable profit is 200,000,000 − 30,000,000 − 15,000,000 = UAH 155,000,000. CIT at 18% is UAH 27,900,000, an effective rate of 27,900,000 / 155,000,000 = 18.0% on taxable profit, since no adjustment items apply in this example. If the after-tax profit of UAH 127,100,000 is fully distributed as a dividend to a non-resident parent in a treaty jurisdiction with a 5% treaty dividend rate (available for qualifying substantial holdings), dividend withholding of UAH 6,355,000 applies, producing a combined burden on distributed profits of 27,900,000 + 6,355,000 = UAH 34,255,000 against pre-tax profit of UAH 155,000,000, an all-in rate of 22.1%. Had the same entity instead been a bank subject to the 2026 50% CIT rate, the standalone CIT charge alone would already exceed this entire all-in combined burden, illustrating the materially heavier wartime tax load on the banking sector.

9.4 Compliance

Expect electronic filing of CIT, VAT and payroll taxes through the State Tax Service's electronic cabinet, real-time electronic VAT invoice registration, and — for in-scope taxpayers — annual transfer pricing reporting and CFC disclosure regardless of whether an inclusion ultimately arises. Groups with Diia City residents, simplified-tax payers or financial-sector entities should track the differing filing rhythms (event-driven, quarterly or annual) that apply across those regimes within a single corporate group. Businesses should also monitor the evolving wartime procedural relief referenced in section 8, as filing and audit timelines have been adjusted at various points since February 2022.