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Discover the taxation system in Ukraine, where various taxes are levied on individuals and businesses.
Ukraine has a number of government programs aimed at providing financial support to businesses
The State Program “Affordable Loans 5-7-9%” provides for
interest compensation to a business entity in order to reduce its actual costs of paying the base interest rate to the appropriate level:
For business entities conducting business activities outside the zone of high military risk, the compensation interest rate is reduced:
Within the framework of the State Program "Affordable Financial Leasing 5-7-9%":
Support under factoring agreements includes:
These programs are mainly regulated by the Resolution of the Cabinet of Ministers of Ukraine On providing financial state support No. 28 dated 24.01.2020.
This program provides for:
This program is mainly regulated by the Law of Ukraine “On State Support of Investment Projects with Significant Investments in Ukraine” No. 1116-IX dated 17.12.2020 and the Law of Ukraine “On Amendments to the Tax Code of Ukraine Concerning Peculiarities of Taxation of Business Entities Implementing Investment Projects with Significant Investments in Ukraine” No. 1293-IX dated 02.03.2021.
Requirements for an investment project with significant investments for which state support may be provided:
More information can be found here: Support for Large Investors
The Law of Ukraine "On Industrial Parks" (Law) defines the legal and organizational grounds for establishing and operating the industrial parks within the territory of Ukraine to ensure economic development and increase the competitiveness of regions, activate investment activities, create new jobs, develop modern industrial and market infrastructure.
The Constitution of Ukraine, the Civil Code of Ukraine, The Economic Code of Ukraine, The Land Code of Ukraine, the Tax Code of Ukraine, the Customs Code of Ukraine, this Law, the Law of Ukraine "On Regulation of City Planning Activity," other legislative acts of Ukraine, as well as international treaties of Ukraine ratified by the Verkhovna Rada of Ukraine.
The Law of Ukraine's "On Industrial Parks" and respective changes to the Tax Code and the Customs Code provide state incentives for investment parks. The following incentives are available for initiators of the creation of industrial parks, their management companies, and participants:
The land plot to be used for the creation and operation of the industrial park may be located within or outside settlements and must meet the following requirements:
The use of land plots on lands of state or municipal property is carried out in compliance with the following conditions:
Facilities that may be located in the industrial park include:
The sources of provision of finance for the development of an industrial park may be funds from the state and local budgets allocated following the procedure and amounts provided for by Law, funds from private investors, including funds attracted under the model of state-private partnership, attracted funds, including loans from banks and other financial and credit institutions, funds from other sources not prohibited by Law.
The initiator makes the decision to create an industrial park of the creation based on the concept of an industrial park approved following the requirements of this Law.
The initiator of the creation, within five working days from the date of the decision to create an industrial park, is obliged to submit to the competent government authority a copy of the decision to develop an industrial park and the concept of the industrial park.
The decision to create an industrial park is the reason for the agreement concluding on the creation and operation of an industrial park between the initiator and the management company of an industrial park.
To decide on the inclusion of the industrial park in the Register of Industrial Parks, the initiator of the creation shall submit the following documents to the authorized state body:
The industrial park is included in the Register of Industrial Parks within 45 business days from the date of receipt of the application from the initiator of the industrial park by the authorized state body.
The authorized state body, following the procedure approved by the Cabinet of Ministers of Ukraine, shall review the documents within 21 business days from the date of receipt of the papers from the initiator of the establishment.
In 2023 the Ukrainian government has adopted significant regulations in employment that provide for compensation for employers for hiring the unemployed persons and creating new workplaces:
Together with the Law of Ukraine "On Employment of the Population", these resolutions provide for such types of compensations:
In the amount of a single contribution (not more than double the minimum insurance contribution) for employment for at least two years of persons who:
Small business entities in the amount of a single contribution for the employment of registered unemployed persons for new jobs for at least two years. The total duration of compensation is 12 months.
Compensation of 50 percent of the actual labor costs incurred by the employer (but not exceeding the minimum wage) for the employment of persons who have been registered as unemployed for more than one month:
The total duration of compensation is 6 months.
If employees are hired for new jobs with a salary of at least three minimum wages over the next 12 calendar months, the employer is reimbursed for actual expenses in the amount of 50 percent of the amount of the accrued unified social contribution.
Compensation of 50 percent of the minimum wage for the employment of unemployed youth. The total duration of compensation is no more than 6 months.
Also, remains in force the Resolution of the Cabinet of Ministers of Ukraine No. 331 dated March 20, 2022, which approved the Procedure for Providing Employers with Compensation for Labor Costs for Employment of Internally Displaced Persons as a Result of Hostilities during Martial Law in Ukraine.
According to this Procedure, the expenses are reimbursed in the amount of UAH 6,700/month for each employed person for whom the employer pays a single contribution for the period of martial law and within 30 calendar days after its cancellation or termination.
The total duration of reimbursement of expenses may not exceed two months.
Ukrainian e-residency offers a convenient and accessible online solution for foreign individuals, particularly IT professionals and consultants, who wish to benefit from Ukraine's favorable tax rates without physically residing in the country. This article provides an overview of the requirements and benefits of e-residency, as defined by the Tax Code of Ukraine.
To qualify as an e-resident, a foreigner must meet the following criteria: Age:
The individual must be at least 18 years old.
Tax Residency: The person should not be a tax resident of Ukraine.
Qualified Electronic Trust Services: The applicant must have obtained appropriate qualified electronic trust services.
Registration: The individual needs to be registered in the E-Resident information system.
Foreigners seeking e-residency should submit an application for acquisition of e-resident status, along with their identification documents, through the E-Resident information system known as the "Dia" application. Once approved, the individual becomes an e-resident, gaining the status of an electronic single taxpayer without VAT, as well as receiving an electronic digital signature.
E-residents are subject to a tax rate of 5% on their income, including VAT, up to a certain limit. The limit is calculated based on the equivalent of 1,167 minimum wages established by law as of January 1 of the tax year, which currently amounts to UAH 7,850,500 (approximately EUR 199,820). Any income exceeding this limit is taxed at a rate of 15%. It is important to note that the resident's bank serves as the tax agent.
All correspondence between e-residents and the tax authorities takes place exclusively through electronic communication in electronic form. Certain individuals are not eligible for e-residency, including Ukrainian citizens, foreigners with permanent residence rights or tax residency in Ukraine, stateless persons, and those receiving income from Ukraine for goods, works, and services (excluding passive income). Additionally, residents or citizens of countries/jurisdictions not included in the List of states whose citizens or residents can obtain e-resident status are also ineligible.
E-residents are only permitted to receive passive income originating in Ukraine, such as interest, dividends, and royalties. They are also restricted to providing services, producing, and selling goods exclusively to non-residents of Ukraine. Furthermore, e-residents are prohibited from employing Ukrainian citizens or residents.
