Ukraine’s tax system consists of three subsystems:
- subsystem of taxation of legal entities;
- subsystem of taxation of individuals;
- fees to the state trust funds.
Under the current law, tax payments are divided into two groups:
- state taxes and levies;
- local taxes and levies.
State taxes and levies
The main national taxes and levies include:
- corporate income tax – 19%;
- individual income tax – 15% (17%);
- VAT – 20%;
- single social payment – from 36.76 to 49.7% of payroll (depending on the class of risk) shall be paid by the employer and 3.6% of the fund of the accrued wages shall be paid employee;
- excise tax;
- fee for first registration of the vehicle;
- environmental tax;
- payment for the land.
Local taxes and levies
The procedure for payment of local taxes and levies shall be established by village, urban-type settlement and city councils. Local taxes and levies include:
- tax on real estate different from a land;
- single tax;
- fee for certain types of business;
- fee for parking vehicles;
- tourist tax.
Simplified tax system
Simplified tax system in Ukraine entitles not to pay a lot of taxes and charges, which facilitates bookkeeping. The simplified taxation system (single tax) can be used by individual entrepreneurs, as well as by resident legal entities. According to the amendments, the simplified tax system since 2012 has been divided into four groups:
- 1st group – entrepreneurs who do not use the hired labor, deal with exclusively retail sales of goods from trading places in the markets and conduct economic activities to provide consumer services and the amount of revenue of whom during a year does not exceed UAH 150 thous. A single tax – from 1% to 10% of the minimum wage.
- 2nd group – entrepreneurs, employs no more than 10 persons and the amount of revenue is less than
1 million, who conduct economic activities to provide services, including residential, to single tax payers and the population, production and sale of goods, activities in restaurant industry. Single tax – from 2% to 20% of the minimum wage.
- 3rd group – those who employ not more than 20 persons and the amount of income does not exceed UAH 3 mln. Single tax – 3% of the proceeds received by paying VAT or 5% excluding VAT.
- 4th group – legal entities, with the average number of employees not exceeding 50 persons. The income is up to UAH 5 mln. Single tax is determined for them as for the third group.
Single tax payers belonging to the third or fourth group shall be entitled to choose a flat tax of 5% on the income without paying VAT or 3% of the income with paying VAT.
Duty, its payers and objects
The objects of taxation are:
- goods, the customs value of which exceeds the equivalent of EUR 500, which are imported into the customs territory of Ukraine or exported from the customs territory of Ukraine by enterprises;
- goods imported (sent) to the customs territory of Ukraine in volumes taxable by customs duties under Article 234 and Section XII of the Customs Code and Sections V and VI of the Tax Code of Ukraine;
- goods, vehicles sold in accordance with Article 243 of the Customs Code.
The tax basis for goods transported through the customs border of Ukraine is:
- for goods, to which the law establishes ad valorem rates of duty – the customs value of goods;
- for goods to which the law establishes specific duty rates – the number of items in the statutory units.
In addition to duty, the person presented the goods to the appropriate customs regime, must pay Value Added Tax (VAT) (20%) and in cases specified by law, the excise duty, if the declared goods belong to excise.