Ukraine Cuts Down Personal Income Tax Rate for Certain Dividends
Avellum, Kyiv, Ukraine
Mon, April 24, 2017
On 23 March 2017 the Ukrainian Parliament adopted Law of Ukraine “On Amendments to the Tax Code of Ukraine regarding clarification of certain provisions and elimination of discrepancies triggered by the adoption of the Law of Ukraine “On Amendments to the Tax Code of Ukraine Regarding Improvement of Investment Climate in Ukraine” No. 1989-VIII (“Law”).
The Law reduces the personal income tax rate from 18% to 9% for the dividends distributed by:
- investment funds
- legal entities, which do not pay corporate income tax in Ukraine (e.g. single tax payers)
The 1.5% military duty continues to apply to such dividends. The 2017 tax reform law also provided for the reduced 9% rate for such dividends. However, the application of the reduced rate was temporarily postponed until the adoption of the law on financial investigation service.
Furthermore, the Law corrects discrepancies related to exemption of property located on temporarily occupied territory and in the Anti-Terrorist Operation Zone from property taxes. In particular, the Law restricts the right of taxpayers to refund or set off property taxes paid for such property.
The Law entered into force on 15 April 2017. Its provisions will apply retroactively, starting from 1 January 2017.