Taxation in Ukraine is performed based on the law of Ukraine “On Taxation System”, which specifies the list of fees, taxes, mandatory payments and contributions. Some separate regulatory legal acts specify their amount and procedure of calculations, and also the tax treatment in Ukraine.
Taxation authorities in Ukraine are the system of state agencies which are involved into attraction of financial resources to the state budget. These agencies include taxation and customs authorities, agencies of pension provision and social insurance (in case of occupational capacity loss, industrial accident, and unemployment), structures of Ministry of Foreign Affairs (including vehicle registration authorities), law enforcement authorities, registry offices, and local regulatory bodies. Tax collection authorities in Ukraine include tax administration and tax inspections in the cities and regions, tax services in the city districts and tax militia which fights tax violations.
Taxation in Ukraine is carried out based on the Tax Code of Ukraine. Its new edition was adopted n January, 2011. Every entrepreneur (commercial entity) must be registered as a taxpayer at the state registration office, and every natural person must obtain 10-digit individual tax number (Taxpayer Identification Number, TIN).
Foreigners must obtain TIN (Taxpayer Identification Number) to issue the notarial documents, to establish a company as a founder or to enter the founders, to legally be employed in the Ukrainian company or to get education in Ukraine, to set up an account in the bank or to gain Ukrainian citizenship. In order to obtain TIN in Ukraine you must provide the passport of the foreigner and its official translation into Ukrainian. If you are not able to be personally present when the documents are submitted to obtain TIN, it is possible to issue a notarized power of attorney, which (together with the translated passport copy) is submitted to the corresponding authorities. TIN is issued in the regional and municipal departments of the state tax administration of Ukraine – no fee for its issuance is paid. The citizens, who refuse to obtain an identification number due to their religious beliefs, must notify the corresponding authorities of Ukraine about it.
As of January 1, 2011 eighteen types of the national taxes and dues are officially recognized in Ukraine – the main ones include: company income tax (23%); personal income tax (15-17%); value-added tax (20%). There are also 5 taxes and dues, which are charged in favor of the local budget. The taxpayer must register the company whose total profit reaches 300 000 hrivnas, or voluntary, by the results of the previous years. It should be noted that VAT is also paid when the goods are imported to be used in the territory of Ukraine. The system of taxation in Ukraine is rather complicated and tangled and sometimes it raises the questions even at the experienced local accountants. There are a lot of details concerning the specific activity. That is why we would advise you to pay special attention to the search of a qualified specialist who should have work experience in the foreign companies. He/she should be not only accurate in accounting but also experienced in regular and correct reporting (monthly in many cases) to the various state accounting authorities.
Ukraine has a strict system of the inspections of company business activity. Almost every third state agency may perform such scheduled and unscheduled inspections. As a kind of joke we call such system “business owner support program”, as the firefighters, sanitary service representatives, Consumer Rights Protection Inspectorate, pension fund, tax authorities, customs authorities, Department of the Treasury, state supervision and auditing service and other agencies and authorities regularly ‘support’ each company (President Decree “On Some Measures for Deregulation of Entrepreneurial Activity”)... However, our businessmen associate the word “inspection” mostly with the tax inspection, as exactly these authorities have the widest power to perform the inspections.
It sometimes seems for the foreigners, who are not familiar with the taxation in Ukraine, that it is very hard to understand this system (we would not tell that impossible). However, we – Ukrainians – and many foreign companies which entered the Ukrainian market, successfully work, pay taxes in Ukraine and gain profit! Sure it seems unreal to eat a whole elephant, but if to try a little, piece by piece, and together with the reliable partners – that is a different story. Important advice – use the services of the experienced specialists: the lawyers, accountants, auditors and you are guaranteed the fast and reliable return of investments and receiving of profit!
If you are planning to start business in Ukraine and you need an advice of the qualified specialists, it would be our pleasure to help you. Contact us, and we will offer the best reliable partners which are able to provide the professional consultations on tax system in Ukraine. They will be ready to cooperate with your company from the very beginning providing you and your company the legal, consulting and professional accountant services.
You can also use the online order forms for translation of the necessary documents, for tour organization services in Ukraineу or download the order forms and send them to us by mail.
|← Legal Issues of Business in Ukraine||Permіssіons to Conduct Busіness Actіvіtіes in Ukraіne →|
Company: Ukraine for Business (UB)
Address: Kyiv, Ukraine
Phone: +38 050 609 27 99
Phone: +38 097 361 30 19
Ukraine for Business (UB) provide the services to the foreigners in the sphere of business and educational tourism, traveling, organization of conferences, translation and interpretation.