Corporate Income Tax in Ukraine: Rules, Rates, and Recent Reforms

Corporate Tax System in Ukraine

The way taxes work here is sorta a mix between usual global rules and local Ukrainian specifics. The main form of corporate income tax in Ukraine (usually called CIT) applies to both resident companies and non-resident businesses that work in Ukraine through what’s called a Permanent Establishment (PE).

Most common types of business structures — like LLCs (limited liability companies) and JSCs (joint-stock companies) — usually fall under the same rules described in the Tax Code of Ukraine. This Tax Code is sorta the main regulatory doc, the backbone that lays down how business taxation is supposed to work in Ukraine.

Even though a lot of stuff looks familiar if you’ve dealt with Western tax systems before, there’s still a bunch of local quirks and restrictions that you really gotta watch out for to stay outta trouble.

Taxation Authorities

In Ukraine, it's mostly the State Tax Service that handles the corporate tax Ukraine stuff — they deal with restrictions, keep an eye on businesses, and tries to make sure everyone's following the money rules. They kinda keep an eye on what both local and foreign businesses are doing, especially when it comes to compliance and proper reporting.

This authority also works together with other state bodies like the Pension Fund, the customs offices, and sometimes even local municipalities. They also help with coordinating reporting flows, audits, and handling disputes when needed.

Even though the system tries to be more transparent now, there's still a lot of paperwork and things that can go wrong if you don’t pay enough attention.

Ukraine Corporate Tax Rate: Current Figures

As of 2025, the regular Ukraine corporate tax rate is set at 18%, which applies to most types of taxable income. There’s few exceptions — like for specific sectors or non-residents — but yes, 18% is kinda the usual rate.

Usually, if you’re paying dividends, royalties, or interests to some non-resident, there's a 15% withholding tax (WHT) — unless there’s a treaty that cuts it. Some treaties do lower that rate, but it really depends which country you’re dealing with.

What Do Corporate Taxes Include?

Ukrainian companies must comply with a wide range of taxes beyond just corporate income tax Ukraine.

Corporate Income Tax

This is the core tax for businesses and is calculated based on profits, i.e., revenues minus allowable expenses. The definition of taxable profits and deductions is described in detail in the Tax Code of Ukraine. Normally, tax rate is 18%, but if the business runs under the simplified tax model, then it works a bit different, then the tax is 5% but is paid not on profit but on the total income received by the company in the reporting period.

VAT

In general, the VAT rate in Ukraine sits at 20%. A reduced 7% rate applies to certain pharmaceuticals and medical goods. You need to register for VAT if your revenue goes over UAH 1 million during any 12-month stretch.

Let me know if you'd like similar edits in other parts. The obligation to be a VAT payer after reaching 1 million hryvnia is only if you are on the general taxation system, if again you are on the simplified taxation system, such a requirement is voluntary.

Real Estate Taxes

If a company owns property in Ukraine, it’ll need to pay yearly tax on it — how much depends on the size and type of the building. Local municipalities get to decide the exact rates, so the final amount can be kinda different from one region to another.

The real estate tax rate is determined by local authorities, taking into account both the type of property and its location. As of 2025, the tax is paid for the reporting year 2024.

The top rate not allowed to go over 1.5% of the minimum wage for each square meter. As of January 1, 2024, the minimum wage in Ukraine was UAH 8,000, in other words, you won’t pay more than UAH 120 per m², no matter what.

Land Taxes

Levied on land users (owners or tenants), this tax depends on the cadastral value and land classification. The land tax in Ukraine can go up to 1% of the land’s normative monetary value. There's also the unified tax, which is applied to income earned from entrepreneurial activities. This unified tax can be used as an alternative to both corporate income tax (CIT) and personal income tax, and it's available for individual entrepreneurs as well as legal entities under certain conditions.

Ecological Taxes

Companies that emit pollutants, produce radioactive waste, or engage in hazardous operations are subject to ecological taxes. This tax is levied on the actual volumes of emissions into the atmosphere, discharges of pollutants into water bodies, waste disposal, and the actual volume of radioactive waste.

Customs Duties

Imports and exports are mostly regulated by Ukrainian customs authorities, and customs duties are applied based on the product classification, origin, and applicable trade agreements. These tariffs are kind of harmonized with international standards and Ukraine’s commitments under WTO and the EU Association Agreement — though, in practice, things sometimes differ a bit.

The exact duty rates vary depending on the HS code of the goods, and some products may even be exempt or enjoy preferential treatment if coming from specific countries. Also, customs clearance often involves extra paperwork and timing delays, which companies should be ready for. Getting it wrong can lead to penalties, overpayments or even shipment delays — so it’s good idea to double-check everything before importing stuff.

Cross-border Payments

Payments to foreign entities may trigger WHT and reporting obligations. Ukraine has tightened control over cross-border debt financing and introduced thin capitalization rules to prevent base erosion.

Tax Regime for IT Industry

The Diia City initiative provides an alternative special tax regime for IT companies. Under Diia City, qualifying companies can benefit from reduced CIT rates (as low as 9% on distributed profits or 18% on profit) and a simplified Payroll Tax model. This regime aims to retain Ukrainian tech talent and attract investment. Diya.City is a great project that allows you to introduce your activities for the IT industry at low tax rates. Besides the 9% tax on withdrawn capital, Diia City companies only pay 5% personal income tax if they take on part-time staff, which is way less than usual rates.

How Corporate Income Is Calculated and Taxed

Corporate income tax Ukraine is calculated on the basis of financial accounting profits, adjusted for taxation purposes as required by the Tax Code of Ukraine. Key adjustments involve depreciation rules, provisioning, bad debts, and non-deductible expenses. Foreign exchange gains and losses are taxable. Interest paid on debt exceeding a certain ratio may be non-deductible under thin capitalization rules.

Resident companies pay CIT on worldwide income, while non-resident entities are taxed only on Ukrainian-source income.

Tax Incentives and Benefits in Ukraine

Ukraine offers various tax benefits, especially to promote investment and economic recovery. These include:

• Accelerated depreciation
• Exemptions from import duties for new production equipment
• Tax holidays for specific industries in industrial parks
• Reduced Payroll Taxes under Diia City

Small businesses can also opt for the simplified tax regime, which applies a turnover-based tax instead of the regular corporate income tax Ukraine.

Recent Reforms in Corporate Income Tax in Ukraine

Recent reforms reflect Ukraine’s alignment with international tax standards and its effort to combat regulatory arbitrage:

• Stricter transfer pricing rules for cross-border operations
• Enhanced reporting for Permanent Establishment (PE)s
• New anti-capitalization rules for intercompany loans
• Requirement to publicly declare who the real beneficial owners (UBOs)
• Expanded cooperation with OECD’s BEPS framework

In 2023–2024, additional legislation introduced tax control over digital goods and services, affecting foreign non-resident IT providers.

Conclusion

Let’s be honest — the Ukrainian tax system isn’t exactly the simplest thing out there. It's pretty layered, and without a decent understanding of how it works, it’s not hard to slip up. If you’re planning to set up an LLC, manage a JSC, or operate through a Permanent Establishment, knowing the rules is a must unless you wanna run into penalties or end up paying more than you should.

And if your company’s already dealing with cross-border activity or thinking about entering the Ukrainian market, talking to a Corporate Lawyer might just save you a lot of trouble — they’ll help make sure you’re covered on both local and international fronts.