Taxation of income (profit) of foreign citizens in Ukraine

According to the national tax legislation of Ukraine, foreigners who arrive in Ukraine on legal (legal) grounds have the same rights and perform the same duties as citizens of Ukraine.

Therefore, if a foreign citizen receives income on the territory of Ukraine, he is obliged to pay tax on such income.

Important questions for foreigners about taxes

The object of taxation of foreigners is income received (earned) on the territory of Ukraine.

Thus, Ukrainian legislation does not prohibit foreigners from doing business in Ukraine if they legally reside in the country.

When registering a foreigner as a taxpayer, he must obtain the registration number of the taxpayer’s registration card.

In addition, foreigners registered as entrepreneurs can choose a simplified taxation system.

We recommend contacting our law firm “Naumenko and Partners” for consultation and clarification of issues related to income taxation.

The status of a tax resident can be determined by such factors as:

• location of the foreigner,
• place of residence,
• business registration,
• registration as a self-employed person,
• stay in Ukraine for at least 183 days during the tax year.

What is the Center for Vital Interests?

“Center of vital interests” corresponds to personal or economic relationships that may affect the recognition of the country’s resident status.

If a person does not have a permanent place of residence in any country and the “Center of significant interests” cannot be determined, then he is considered a resident of Ukraine provided he stays in the country for at least 183 days in the tax period.

Therefore, Ukraine has signed a number of international treaties on the avoidance of double taxation.

This represents over 72 countries worldwide.

The issue of double taxation is especially relevant for an individual registered in Ukraine, since income from the activities of a foreign individual may also be taxed by Ukraine.

To avoid possible problems, we advise you to carefully study the international agreement of our country with the relevant foreign jurisdiction in order to avoid double taxation.

And in general, tax lawyers would not advise equating residency with tax evasion schemes.

Features of taxation for non-residents

According to the international agreements on the avoidance of double taxation concluded by Ukraine, a person who is not a resident of the country of the agreement can enjoy benefits or be exempt from income taxation.

For this, it is necessary to obtain an appropriate certificate on the avoidance of double taxation from the authorized body of the country of the agreement.

This certificate must be in the form recognized by international agreements, legalized and translated into the state language in accordance with the legislation of Ukraine.

In the event that a non-resident of Ukraine receives income from its territory and has diplomatic privileges and immunity provided by international agreements of Ukraine regarding income received from diplomatic or similar activities, such a person is exempt from taxation of income received on the territory of Ukraine.

The legal company “Naumenko and Partners” has been providing legal services to foreign citizens for a long time in the comprehensive and qualified support of cases related to taxation of the income (profit) of foreigners in Ukraine and we will help you save significant sums of money, avoid mistakes in the actual payment of relevant payments and fees and make maximum use of the benefits offered by law, as well as minimize the risks of disputes with tax and other government authorities.