Ukraine Corporate Tax - Guide for International Expansion

Are you considering expanding your business operations to Ukraine? Understanding the corporate tax landscape is crucial for any international business venture, especially given Ukraine's unique economic situation.

Ukraine offers a complex but potentially rewarding business environment with specific tax obligations that companies must navigate carefully. Whether you're establishing a new subsidiary or exploring investment opportunities, having a clear grasp of corporate tax requirements will help ensure compliance and successful operations.

Wise Business can help streamline your international payments and currency management as you expand into Ukrainian markets.

💡 Learn more about Wise Business

This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Ukraine Corporate Tax Rate in 2025

The standard corporate income tax rate in Ukraine is 18% for most businesses, and this rate has remained consistent in recent years. It applies to the taxable profits of Ukrainian resident companies and to the profits of permanent establishments of non-resident companies operating in Ukraine.¹

From 1 January 2025, a higher corporate tax rate of 25% applies to financial institutions (excluding insurance companies), while banks are subject to special elevated rates introduced in previous years.¹

Ukraine also operates a simplified taxation system for small businesses. Under the unified tax regime (“single tax”), qualifying small taxpayers can opt for simplified rates of 3% or 5% on turnover, depending on their VAT registration status. Eligibility criteria include turnover and employee limits, which vary by category but generally target micro and small enterprises.²

For the technology sector, Ukraine has introduced the Diia City special regime, designed to attract IT and digital businesses. Companies registered under this framework benefit from preferential taxation on certain types of income, such as dividends and salaries, though there is no general 5% corporate profit tax applicable to all IT companies.³

Non-resident companies are subject to withholding tax (WHT) on Ukrainian-source income. The standard domestic WHT rate is 15% on dividends, 15% on royalties, and 15% on interest payments, unless reduced by an applicable double taxation treaty. Certain categories of income, such as freight payments, may be taxed at different rates under specific provisions.¹

HOW TO PAY CORPORATE TAX IN UKRAINE

Corporate tax payments in Ukraine are made in Ukrainian hryvnia (UAH) through the electronic system managed by the State Tax Service of Ukraine. Companies must register with the tax authorities and obtain a tax identification number before commencing operations.⁴

The tax year in Ukraine generally corresponds to the calendar year, running from 1 January to 31 December. Companies must file their corporate income tax returns based on their reporting period. For most companies following the calendar year, returns must be submitted within 60 calendar days after the end of the year, while quarterly filers submit within 40 days after the end of each quarter. Taxes due based on the return must be paid within 10 calendar days after the filing deadline.⁵

Certain companies are required to make advance corporate tax payments. The timing and frequency of these payments depend on the company’s activities, size, and sector. Some companies, such as certain large taxpayers or specific industries, are required to pay monthly advances, while others follow different schedules.³

Late payment or late filing of corporate tax results in penalties and interest charges. The penalty is 10% of the outstanding tax if the delay does not exceed 30 calendar days, increasing to 20% for longer delays. Interest on overdue tax is accrued daily at a rate linked to 100%/120% of the National Bank of Ukraine’s key (discount) rate.⁵

Let's calculate the tax liability for a company with annual turnover of UAH 60 million (approximately £1.5 million) and a profit margin of 10%, resulting in taxable profits of UAH 6 million:

At Ukraine's standard corporate tax rate of 18%, the annual tax due would be:

UAH 6,000,000 × 18% = UAH 1,080,000 (approximately £27,000)

When expanding your business to Ukraine, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

Get started with Wise Business 🚀

Tax Compliance in Ukraine

The tips to help your company stay compliant with the Ukraine corporate tax policy:

• Understand government audits: The State Tax Service conducts scheduled on-site inspections of companies listed on its published audit plan. Unscheduled audits may also occur if a company fails to file returns or breaches other statutes. Certain entities, such as JSCs, banks, insurers, and financial institutions, are subject to mandatory audits.
• File returns on time: Most taxpayers submit Corporate Income Tax (CIT) returns quarterly, within 40 calendar days of the period’s end. Annual filing applies to new companies, agricultural producers, or businesses with yearly income below UAH 40 million. VAT and simplified tax returns must be filed monthly within 20 days, while the fourth-quarter CIT return is due within 60 days.⁵
• Pay taxes correctly: Taxes must be paid within 10 days after the filing deadline. A unified tax account allows businesses to settle CIT, PIT, and social contributions in one place, though VAT and excise duties remain separate. This solution simplifies compliance with corporate tax instalment due dates.
• Avoid penalties: Late filings, underpayments, or unregistered invoices can trigger significant penalties ranging from 10% to 150%, plus late payment interest.⁵ Professional corporate tax solutions can help businesses navigate complex rules and align with global corporate tax standards.

International Expansion to Ukraine

As global investors look toward Eastern Europe, Ukraine stands out with its business-friendly reforms. it is the continent’s largest country by land area, home to over 36 million people in 2024.⁶ Its borders with seven countries make it a strategic transit corridor connecting the European Union, Asia, and the Middle East.⁷ Ukraine’s EU candidate status further strengthens its appeal to investors seeking long-term market access and alignment with European standards.⁸

The country’s economic fundamentals remain strong despite the ongoing conflict. It has a highly educated workforce, where 70% of people hold secondary or higher education.⁷ Sectors like agriculture, IT, energy, and mineral resources drive growth.⁶ The IT industry has expanded rapidly, with professionals rising by 78% in five years. And the country now ranks among the top five in The Good Country Index for contributions to science and technology.⁹ Defence technology and innovation clusters have also gained significant traction, supported by local and international investment.

Moreover, reconstruction is expected to reshape the economy. International donors, including the EU, IMF, World Bank, and EBRD, have pledged billions to support recovery, modernisation, and EU accession.⁶ Recent commitments, such as €2.3 billion in EU-backed guarantees to unlock €10 billion in investments, highlight the scale of opportunities.⁸ Agriculture exports, supported by initiatives like “Made in Ukraine,” continue to grow, while infrastructure improvements aim to enhance logistics and connectivity.⁶

Below are the steps to take when setting up a business in Ukraine:¹⁰

1. Conduct market research to understand the business environment and target audience.
2. Create a solid business plan tailored to Ukraine’s market.
3. Choose a suitable legal entity for your company.
4. Register with the state registrar and submit incorporation documents.
5. Disclose Ultimate Beneficial Owners (UBOs), as required by Ukrainian law.
6. Open a corporate bank account with a Ukrainian bank.
7. Consider opening hryvnia (UAH) and foreign currency accounts to manage transactions under currency controls.
8. Ensure thorough preparation to stay compliant and establish a smooth entry into Ukraine’s market.

It’s quite evident that Ukraine could be your next big step in taking your business beyond borders. Get the basic information, likehow to open a bank account in Ukraine, before you land here, because you’ll have a lot to do once you start settling your business in this region.

Incorporation of Business in Ukraine

Most companies register a limited liability company (LLC) to incorporate a business in Ukraine. Registration is simple and can be completed online through the Ministry of Justice portal or in person at a local registrar’s office. Both processes take up to 24 hours and are free of charge.

To register an LLC, you need to prepare the following:^{11 12}

• Company name: must be unique and verified against the Unified State Register.
• NACE code: specify your main activity and add others for potential future operations.
• Legal address: an official contact point for government agencies and partners.
• Authorised capital: funds or assets contributed by founders to cover liabilities.
• Founders’ meeting: approve the company name, legal address, capital contributions, management, and charter.
• Application for state registration: submitted online or in person; processing usually takes 3–7 days.
• Taxation system: new entities default to the general taxation system, but you may apply for the simplified regime during registration.
• Bank account: companies typically open both hryvnia and foreign currency accounts.
• Electronic digital signature: required for filing reports, available through the State Tax Service or participating banks.

A company seal is optional under Ukrainian law.

Business Types in Ukraine

Ukrainian law recognises several business forms, each suited to different needs:¹³

• Limited Liability Company (LLC / ТОВ): The most common option. Liability is limited to members’ contributions. Ownership is expressed as parts rather than shares. Suitable for small to large businesses.
• Joint Stock Company (JSC / АТ): Can issue shares, which must be registered with the Securities Commission. Offers public or private options but requires stricter compliance, making it more suitable for larger companies.
• Representative Office (RO): Non-commercial presence for market research or liaison activities.
• Branch Office (Permanent Establishment): This allows a foreign company to conduct commercial activities in Ukraine but requires registration for tax purposes.
• Joint Venture (JV): A cooperative agreement between a foreign investor and a Ukrainian partner. It is not a separate legal entity but allows shared profit-making or project activity.
• Private Entrepreneur (PE): Individuals can register as sole proprietors under the simplified tax regime. This form is easy to maintain and open to foreign citizens, though it does not grant residence rights.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires strategic planning and robust compliance systems. Companies should establish clear procedures for tracking tax obligations, maintaining accurate financial records, and ensuring timely payments in each jurisdiction.

Understanding double taxation treaties is crucial for international businesses. Ukraine has signed double taxation agreements with over 70 countries, which can significantly reduce withholding tax rates and prevent double taxation of the same income.

Businesses should also consider the impact of transfer pricing regulations when operating across borders. Ukraine has implemented OECD transfer pricing guidelines, requiring companies to maintain documentation supporting their intercompany transactions and pricing policies.

Regular consultation with local tax advisors and maintaining up-to-date knowledge of regulatory changes helps ensure ongoing compliance and optimisation of tax positions across all operating jurisdictions.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Ukraine efficient and simple. It's the one account for managing your money globally.

With a Wise Business account*, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.
• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.
• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.
• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

Get started with Wise Business 🚀