Withholding Tax

The basic rate of the withholding tax (WHT) is 15%. The tax applies to the income payable to non-resident entities that was derived from sources within Ukraine.

For WHT purposes such income includes, inter alia, the following items:
• Interests
• Dividends
• Royalties
• Fright payments
• Lease payments
• Income from sell of immovable properties
• Income from transactions with securities
• Other income, except for the income obtained from sell of goods and provision of services.

The WHT should be withheld from the amount due to be paid to the non-resident entities. Gross-up provisions are prohibited.
The rate of tax may be reduced or the payment may be exempt from taxation under provisions of respective Double Tax Treaty (DTT). In order to be able to apply treaty provisions a resident entity must obtain a residency certificate from a non-resident entity confirming the residency of the latter.

Ukrainian law provides for a beneficial ownership test. Should this test be not met the tax authorities could deny application of the treaty benefits.

According to Ukrainian laws, international legislation is given preference over the domestic laws and regulations.
Ukraine is not an EU member and provisions of EU treaties, including those related to taxes, are not applicable in Ukraine.