Corporate Tax in Ukraine

Ukraine's corporate tax system features a standard rate of 18% with special regimes for IT companies under Diia City and simplified taxation for individual entrepreneurs.

Corporate Income Tax Rate

The standard corporate income tax (Podatok na prybutok) rate in Ukraine is 18% of taxable profits. This applies to all resident companies and foreign companies with a permanent establishment in Ukraine.

Diia City Regime

IT companies registered under the Diia City special legal regime may benefit from:

• CIT exemption: 0% rate on qualifying income (replaces 18% CIT)
• Reduced PIT: 5% on distributed profits instead of 18%
• Reduced SSC: Lower social security contribution rate

Taxable Income

Taxable income is calculated as gross revenue minus allowable deductions. The tax year in Ukraine follows the calendar year. Companies must maintain proper accounting records in accordance with Ukrainian Accounting Standards or IFRS.

Deductible Expenses

• Operating expenses directly related to business activities
• Depreciation of fixed assets
• Interest expense (subject to thin capitalization rules)
• Rent and lease payments
• Employee salaries and social security contributions
• Professional fees and consulting costs
• Research and development expenses
• Marketing and advertising costs

Non-Deductible Expenses

• Fines and penalties
• Dividends distributed
• Capital expenditures (must be depreciated)
• Personal expenses of shareholders
• Donations to non-approved organizations

Simplified Taxation for Individual Entrepreneurs

Individual entrepreneurs (FOP) may choose the simplified system:

• Group 3: 5% of turnover (plus 1.5% military levy)
• Group 2: Fixed rate (varies by region)
• Group 1: Fixed minimal rate for very small businesses

Tax Incentives

• Diia City: 0% CIT for qualifying IT companies
• Industrial parks: Incentives for qualifying investments
• Carryforward of Losses: Tax losses can be carried forward indefinitely
• Accelerated Depreciation: Available for certain qualifying assets

Filing Requirements

• Annual Tax Return: Due by March 1 following the tax year
• Quarterly Returns: For most taxpayers, quarterly filing
• Monthly Returns: For VAT and withholding taxes
• Transfer Pricing: Documentation required for controlled transactions

Withholding Taxes

Companies are required to withhold tax on certain payments:

• Dividends: 5% (residents), 15% (non-residents)
• Interest: 0% on bank deposits, 18% on corporate bonds
• Royalties: 15%
• Services to non-residents: Varies by treaty