Paying Taxes in Ukraine

 1. What is the corporate tax in Ukraine?

In 2011, the standard corporate tax rate in Ukraine is 23%, but it will be reduced during the next three years. This way, the corporate tax is announced to be 21% in 2012, 19% in 2013 and 16% in 2014.

2. What is the VAT in Ukraine?

The standard VAT rate in Ukraine is 20%, but it is announced to be reduced in 2014 to 17%. Export goods are zero VAT rated, while medical products, domestically prepared baby food products, publish periodicals and books are not subject to VAT rate.

3. How can the VAT be refunded in Ukraine?

A VAT refund is only possible if the company performs its activity in Ukraine, after it has been registered as an establishment and VAT payer. The tax can be recovered by the company only if it meets the requirements of the tax authorities, including the presence of all invoices that need to specify some information.  Since the 1st July 2011, if the amount in a tax invoice exceeds 100,000 UAH, the invoice has to be registered in the Unified Register of Tax Invoices. By the end of 2011, Ukraine will offer automatic VAT refund to all companies.

4. What is the dividend tax in Ukraine?

When dividends are paid between resident companies, there is no dividend tax charged. At the same time, if the dividends are paid to a nonresident company, the tax rate is 15%.

5. Are there any incentives for foreign investors in Ukraine?

Ukrainian authorities encourage foreign investments by treating a foreign company that establishes in Ukraine as a local business. The legislation offers tax exemption for several services or goods, such as baby food of internal production.  Despite the tough economic conditions in Ukraine caused by the financial crisis, foreign investors found profitable segments for business and set up companies.

6. Why do I need a local accountant for my business in Ukraine?

Tax accounting regulations in Ukraine are very complex and need a certain experience together with a solid knowledge of the local legislation in order to succeed in facing the system. Therefore, a local accountant would be the most proper choice in order to have an efficiently run business in Ukraine.

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