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Ukraine: Taxes and Costs

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Taxes in Ukraine are moderate to high

Effective Tax Rate on Rental Income
Monthly Income	€1,500	€6,000	€12,000
Tax Rate	15%	15%	15%
Click here to see a worked example
Source:			Disclaimer

INDIVIDUAL TAXATION

Non-residents are taxed on their income from Ukrainian sources. Married couples are taxed separately.

INCOME TAX

Non-residents are generally taxed at 15% on all their income from Ukraine, withheld at source.

RENTAL INCOME
Gross rental income earned by non-residents is taxed at 15%. Rental agreements with a lessee-individual not registered as a private entrepreneur must be notarized.

When income from renting real estate is declared, the amount declared cannot be lower than minimum rental fee determined according to the methodology established by the Cabinet of Ministers of Ukraine, though the declared amount may of course be higher (if the real contractual rent is higher).

Non-resident landlord registered as a private entrepreneur

An non-resident landlord, as an individual entrepreneur, may opt for the simplified tax (unified tax) regime provided that his gross income does not exceed UAH500,000 (€61,587). Under this regime, the individual is required to pay lump sum amounts every month, typically between UAH20 (€2.46) and UAH200 (€25). The exact monthly liability, which serves as the individual’s income tax, depends on the municipality where the property is located.

CAPITAL GAINS TAX

As of 1 January 2007, capital gains realized from sale of dwellings (houses, apartments, summer houses) measuring 100 sq. m. or less are exempted from tax. A 1% tax is levied on the capital gains of dwellings with sizes exceeding 100 sq. m. The taxable gain is computed as selling price less the acquisition cost of the property.

Capital gains earned on the second and any additional sale of similar real estate property (any size) within the same tax year are subject to 5% tax.

VALUE ADDED TAX (VAT)

Value added tax is levied at a flat rate of 20%. Leasing a building, premises or land is subject to 20% VAT. The sale of buildings or premises is also subject to 20% VAT.

PROPERTY TAX

Land Tax

Land tax is levied on Ukrainian land and property at 1%, payable by the owners or users of the property. The taxable value is the property value at the beginning of the calendar year. If the value of the property cannot be determined, land tax is levied at a specific amount per sq. m.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by corporations are taxed at the standard corporate tax rate of 25%. All expenses incurred in respect of business activities are deductible for corporate tax purposes.

Ukraine - more data and information

• Guide to buying houses and registering property sales in Ukraine

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