How can Ukrainians pay taxes abroad?

Ukrainian citizens who receive income abroad should take into account the following aspects of taxation:

1. Determination of tax residence:

• Residency criteria: Tax residence is determined by the following criteria:
• Permanent residence.
• Center of vital interests (family, economic ties).
• Staying in the country for more than 183 days during a calendar year.
• Bilateral agreements: Ukraine has double taxation treaties with many countries. These agreements help determine in which country to pay taxes if a person is considered a resident of two countries at the same time.

2. Taxation of foreign income in Ukraine:

• Declaration obligation: Ukrainian tax residents are obliged to declare foreign income and pay personal income tax (PIT) at the rate of 18% and military duty at the rate of 5%.
• Credit for taxes paid abroad: If taxes have been paid abroad, they can be credited in Ukraine if supporting documents are provided. This allows avoiding double taxation.

3. Taxation in the host country:

• Local tax liabilities: In case of acquiring the status of a tax resident of another country, a person is obliged to pay taxes in accordance with the laws of that country. Residency criteria and tax rates may vary from country to country.

To confirm the status of a tax resident of Ukraine, an individual must obtain a confirmation certificate from the State Tax Service of Ukraine (STS). This certificate confirms that the individual is a taxpayer in Ukraine and is subject to international treaties for the avoidance of double taxation.

Procedure for obtaining the certificate:

1. Preparation of the application:

• Fill out an application for confirmation of resident status for the avoidance of double taxation. The application form is available on the official website of the State Tax Service or in the taxpayer's electronic cabinet.

2. Submission of the application:

• Online: Log in to the taxpayer's electronic cabinet on the STS website, upload the completed application and sign it with a qualified electronic signature (QES).
• In person or by mail: Submit the application to the supervisory authority at the main place of registration. In case of temporary stay outside the place of residence or lack of permanent residence, the application can be submitted to any supervisory authority.

3. Consideration of the application:

• The STS checks the data specified in the application for compliance with the Tax Code of Ukraine and international treaties. If necessary, additional documents may be requested to confirm the grounds for determining the residency status.

4. Obtaining a certificate:

• The certificate or a reasonable refusal to issue it is provided within 10 calendar days from the date of receipt of the application. The certificate can be issued in electronic form through the electronic cabinet or in paper form in person or by mail.

Please note:

• Validity of the certificate: The certificate is valid for the calendar year in which it is issued and requires annual renewal.
• Language of the certificate: The certificate is issued in Ukrainian with the possibility of transliteration into English. If necessary, you can obtain confirmation of residency status on documents in special forms approved by foreign competent authorities.