Corporate income tax in 2024

Rate

Tax Object

Taxpayers

1

2

3

Basic (standard) tax rate 18 percent

Profit from sources within and outside Ukraine, determined by adjusting (increasing or decreasing) the financial result before taxation (profit or loss) as stated in the financial statements of the enterprise according to national provisions (standards) of accounting or international financial reporting standards, including differences defined by relevant provisions of the Tax Code of Ukraine (hereinafter -

TCU)

Residents:

business entities - legal entities, engaged in economic activities both in Ukraine and abroad, except non-profit legal entities

enterprises, institutions and organizations and business entities applying the simplified system of taxation, accounting and reporting defined in Chapter 1 of Section XIV of TCU, except if:

business entities

legal entities that have chosen the simplified system of taxation: pay

income (profits) to a non-resident originating from Ukraine as defined by item 141.4 of article 141 TCU. In this case, taxpayers of the single tax of the fourth group are not taxpayers when paying incomes defined in paragraphs fourth - sixth of sub-item 14.1.49 of item

14.1 of article 14 TCU;

receive adjusted profit of a controlled

foreign company, taxed in accordance with article 39 sec. 2 and Section III TCU (controlling persons);

Manager

of a real estate transaction fund, who

Basic (standard) tax rate 25 percent*

for the purposes of:

a) taxation of bank profits, defined in accordance with sub-item 134.1.1 of item 134.1 of article 134 TCU;

b) taxation of adjusted profits of a controlled foreign company of a bank, defined in accordance with article 39 sec. 2 TCU;

c) application of the provisions of item 57.1 sec.1 of article 57 TCU to the payment of dividends by banks

*for the fiscal (reporting) year 2023, the basic (standard) corporate income tax rate for the purposes of taxing the profits of banks, as well as for application concerning banks of the provisions of item 57.1 sec. 1 of article 57 TCU, is

50 percent (item 68 subsection 4 section XX "Transitional Provisions" of TCU)

Payment of advance contributions for corporate income tax

in the manner prescribed by item 141.13 of article 141 TCU

(The amount of advance contributions paid during the fiscal (tax) year will reduce the corporate income tax calculated for such a fiscal (tax) year by an amount not exceeding the accrued tax liability for such a tax (reporting)

period)

three minimum wages* - for each foreign currency exchange point located in a locality with a population exceeding 50 thousand

one minimum wage* - for each foreign currency exchange point located in other localities or outside localities

*as set by law as of January 1st of the reporting (tax) year

During 2023, taxpayers will make such advance contributions considering the following peculiarities:

from January 1, 2023, to June 30, 2023 - applying a coefficient of 0.33;

from July 1, 2023, to December 31, 2023 - applying a coefficient of 0.66

adjusted profit of a controlled foreign company, defined in accordance with article 39 sec. 2 TCU

18 percent

(Such tax object is determined separately from the tax objects defined in sub-items 134.1.1 -

134.1.6 of item 134.1 of article 134 TCU. In case of several controlled foreign companies, the tax object is determined separately for each such company)

Income of the insurer

operates in accordance with the Law of Ukraine "On financial-credit mechanisms and property management in housing construction and real estate transactions" concerning operations and results of the activity in trust management, conducted by such a manager through a fund; individual entrepreneurs, including those who have chosen

the simplified system of taxation, and individuals conducting independent professional activity, regarding the incomes (profits) paid to a non-resident originating from Ukraine, taxed under the provisions of item 141.4 of article 141 TCU;

legal entities formed in accordance with the laws of other countries (foreign companies) that have their effective management location in Ukraine.

Non-residents:

legal entities formed in any legal form and receiving incomes originating from Ukraine, except for institutions and organizations having diplomatic privileges or immunities according to international

treaties of Ukraine;

non-residents conducting economic activities in Ukraine through a permanent establishment and/or receiving incomes from

During the conduct of insurance activity by legal entities - residents simultaneously with the basic corporate income tax rate of 18 percent, the following income tax rates are applied:

3 percent

the amount of insurance payments, insurance contributions, insurance premiums, accrued under insurance and co-insurance contracts. In this case, insurance payments, insurance contributions, insurance premiums under co-insurance contracts are included in the tax object of the insurer only to the extent of his share of the insurance premium as provided by the co-insurance contract

0 percent

the amount of insurance payments, insurance contributions, insurance premiums, accrued under long-term life insurance contracts, voluntary health insurance contracts, and contracts within the non-state pension provision, including contracts of additional pension insurance, and long-term life insurance contracts, voluntary health insurance contracts, contracts of additional pension insurance

Incomes from activities in the organization and conduct of gambling, activities in the issuance and conduct of lotteries

During the conduct of activities in the organization and conduct of gambling simultaneously with the corporate income tax rate of 18 percent, the following income tax rates are applied:

10 percent

income received from the organization and conduct of gambling in gaming machine halls;

18 percent

income received from activities in the organization and conduct of gambling, excluding income received from the organization and conduct of gambling in gaming machine halls, reduced by the amount of payouts to the player.

30 percent

income received from activities in the issuance and conduct of lotteries

Operations of Diia City residents - taxpayers on special terms

During the conduct of activities, Diia City residents - taxpayers on special terms in accordance with the Law of Ukraine "On stimulating the development of the digital economy in Ukraine" apply tax rates of 9 percent* and 18 percent

(Diia City residents - taxpayers on special terms do not separately determine the tax object provided

by sub-item 134.1.1 of item 134.1 of article 134 TCU)

originating from Ukraine, and other non-residents, who are obligated to pay tax in the manner established by Section III TCU

9 percent*

(analogue of the tax on withdrawn

capital)

tax base of operations, defined according to the provisions of item 135.2 of article 135, item 137.10 of article 137 and item 141.9 sec. 1 (except

sub-items 141.9 sec. 1.3 and 141.9 sec. 1.4) of article 141 TCU

18 percent

tax base of controlled operations, defined by article 39 TCU, the conditions of which do not comply with the "arm's length" principle;

adjusted profit of a controlled foreign company, defined in accordance with article 39 sec. 2 TCU (if Diia City resident - taxpayer on special terms is a controlling person)

* Diia City residents, who have not chosen (not transitioned to) the special tax regime, pay corporate income tax on general terms

(18 percent) and are considered Diia City residents who are not taxpayers on special terms

Incomes (profits) of non-residents and persons equated to them originating from Ukraine

18 percent

profits of non-residents obtained in the form of income from interest-free (discount) bonds or treasury obligations, considering that:

the tax base is the profit calculated as the difference between the nominal value of interest-free (discount) securities paid or accrued by their issuer and the purchase price of these securities on the primary or secondary stock market

Permanent representation

of a non-resident or a resident who works on behalf, at the expense of, and under the direction of such a non-resident, withhold tax from such incomes

on their account

15 percent

interests, discount incomes, paid in favor of a non-resident, including interests on loans and debt obligations issued (issued) by a resident;

dividends paid by a resident; royalties;

engineering income;

leasing/rental payment made by residents in favor of a non-resident - lessor/landlord under operational leasing/rental agreements;

incomes from the sale of real estate located in Ukraine, owned by a non-resident;

profit from carrying out transactions with the sale or other alienation of the following investment assets:

securities, derivatives or other corporate rights in the share capital of legal entities residents, except those traded on the stock exchange included in the list approved by the Cabinet of Ministers of Ukraine according to sub-item

"a" of sub-item 141.4.11 of item 141.4 of article 141 TCU; shares, corporate rights, stakes in foreign

companies, organizations, formed according to the legislation   of    other    states    (foreign    legal 

entities), except those traded on the stock exchange included in the list approved by the Cabinet of Ministers of Ukraine according to sub-item

"a" of sub-item 141.4.11 of item 141.4 of article 141 TCU, meeting such conditions:

a) at any point in time during the 365 days preceding the sale or other alienation, the value of shares, stakes, corporate or other similar rights of a foreign legal entity is formed by 50 percent or more through shares, stakes in a Ukrainian legal entity belonging to the said foreign legal entity directly or indirectly, and

b) at any point in time during the 365 days preceding the sale or other alienation, the value of shares, stakes in a Ukrainian legal entity is

50 percent or more formed by real estate located in Ukraine and owned by such a Ukrainian legal entity or used by such a Ukrainian legal entity on the basis of an operational or financial lease (leasing) agreement or a similar contract, and such use must be reflected in the accounting of such a legal entity as an asset, including an asset with the right of use, according to the requirements of national provisions (standards) of accounting or international financial reporting standards;

shares, corporate rights in the share capital of a legal entity - a resident of Ukraine, provided that at any time during the 365 days preceding the sale or other alienation, the value of such shares, corporate rights was formed by 50 percent or more by real estate located in Ukraine and belonging to such a legal entity - a resident of Ukraine or used by such a legal entity - a resident of Ukraine on the basis of an operational or financial lease (leasing) agreement or a similar contract, and such use must be reflected in the accounting of such a legal entity as an asset, including an asset with the right of use, according to the requirements of national provisions (standards) of accounting or international financial reporting standards.

The value of shares, stakes, corporate or other similar rights (for the purposes of paragraphs fourth and sixth of sub-item "e" of this sub-item) and real estate (for the purposes of paragraphs fifth and sixth of sub-item "e" of this sub-item) is determined based on the balance (residual) value according to the accounting data as the highest amount at any point in time during the 365 days preceding the sale or other alienation, and is subject to comparison with the value of other property (assets) according to the

balance (residual) value according to the accounting data of such a legal entity;

incomes received from conducting joint activities in Ukraine, incomes from carrying out long-term contracts in Ukraine;

remuneration for carrying out cultural, educational, religious, sports, entertainment activities in Ukraine by non-residents or persons authorized by them;

brokerage, commission or agency remuneration received from residents or permanent representations of other non-residents regarding brokerage, commission, or agency services provided by a non-resident in Ukraine on behalf of residents;

incomes received from activities in the entertainment sector (excluding activities related to conducting lotteries);

incomes in the form of charitable contributions and donations in favor of non-residents;

incomes from the alienation of rights to explore and develop deposits of minerals, mineral springs, and other natural resources located in Ukraine, belonging to a non-resident;

other incomes from conducting economic activities by a non-resident in Ukraine, excluding incomes in the form of revenue or other types of compensation for goods sold, work performed, services provided, delivered, performed, provided to a resident (permanent representation of another non-resident) from such a non-resident, including the value of services related to international communication or international information provision.

Subsidies for the return of part of qualified expenses provided by the Law of Ukraine "On State Support of Cinematography in Ukraine" are not considered as incomes for the purposes of this item.

Resident, including an individual entrepreneur, an individual conducting independent professional activity, or a business entity

(legal entity or individual

entrepreneur), who has chosen the simplified system of taxation, or another non-resident conducting economic activities through a permanent representation, making any payment of income originating from Ukraine on behalf of a non-resident or

authorized person, withhold    tax    from

such    incomes    on    their account

6 percent

the amount of freight paid by a resident to a non-resident under freight contracts. In this case, the

tax base is the basic rate of such freight

4 percent

within insurance contracts for risks outside Ukraine, under which insurance payments (insurance

compensations) are made in favor of non-residents

Insurers or other residents, including individual entrepreneurs, individuals conducting independent professional activity, or business entities

(legal entities or individual entrepreneurs), who have chosen the simplified system of taxation, another non-resident conducting economic activities through a permanent representation, making        insurance

payments and insurance payouts      to      the 

benefit  of a non-resident, pay tax on their own account

12 percent

in other cases not specified above

0 percent

within mandatory types of insurance contracts, under which insurance payouts (insurance compensations) are made in favor of individual non-residents, as well as under insurance contracts within the system of international treaties "Green

Card", and under insurance contracts for passenger transportation in civil aviation

Insurers or other residents, including individual entrepreneurs, individuals conducting independent professional activity, or business entities

(legal entities or individual entrepreneurs), who have chosen the simplified system of taxation, another non-resident conducting economic activities through a permanent representation, making insurance payments and insurance payouts

0 percent

during the conclusion of insurance or reinsurance contracts of risk directly with insurers and reinsurers-non-residents, the financial reliability (stability) rating of which meets the requirements set by the national commission regulating the markets of financial services (including through or by means of reinsurance brokers, who confirm in the manner defined by such a national commission, that the reinsurance has been carried out with a reinsurer, the financial reliability (stability) rating of which meets the requirements set by the said national commission), and also during the conclusion of reinsurance contracts of mandatory insurance of civil liability of a nuclear facility operator for damage that may be caused by a nuclear incident

5 percent

incomes of non-residents in the form of interests on loans or financial credits provided to residents, simultaneously meeting the following conditions:

a) funds provided by the non-resident under a loan or financial credit were attracted by issuing foreign debt securities on a foreign stock exchange included in the list approved by the Cabinet of Ministers of Ukraine;

b) funds provided by the non-resident under a loan or financial credit were attracted for the purpose of providing (directly or indirectly) a resident with a loan or financial credit;

c) the non-resident to whom the interests are paid and/or the authorized person (if the interests are paid through such a person) are not residents of jurisdictions which, on the date of placement of foreign debt securities by the non-resident, are included in the list of states (territories) approved by the Cabinet of Ministers of Ukraine according to sub-item 39.2.1.2

of sub-item 39.2.1 of item 39.2 of article 39 TCU

Residents making payments to a non-resident in the form of interests on loans or financial credits pay tax from such incomes