Taxes and Accounting in Ukraine

Overview by Globlatrade.net:

Accounting Rules

Tax Year
The fiscal year begins on 1 January and ends on 31 December of the same year.
Accounting Standards
The Law on Accounting and Financial Reporting, effective from 1 January 2000, introduced National Accounting Regulations (Standards) (NR(S)AU). The law states that these local standards should not contradict International Financial Reporting Standards (IFRS), but in practice there are gaps between the two. 
Accounting Regulation Bodies
Accounting Law
Accunting law
Accounting Reports
The Ukrainian accounting rules are very complex in terms of taxes.
Accounting, in Ukraine, mixes tax system and financial accounting.
As taxes are excessive in the Ukraine, this makes accounting increasingly complicated.

The financial status is made up of the statement, the profit and loss account and the cash flow statement.

Publication Requirements
Financial statements must be prepared quarterly. Ukrainian accounting standards apply.
Professional Accountancy Bodies
UFPAA , Ukrainian Federation of Professional Accountants and Auditors.
UACAA , Ukrainian Association of Certified Accountants and Auditors (in Ukrainian)
Certification and Auditing
The external control of accounts must be given to a body of auditors chosen by the company.
The Chamber of Accounts is the highest body of financial and economic review in the Ukraine. There is also the Ukranian Federation of Professional Accountants and Auditors and the Accounting Chamber of Ukraine.
Accounting News
Accounting news (website in Russian and Ukrainian languages).
Ein News: Russia and CIS Accounting News (including Ukraine).

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Tax Rates

Consumption Taxes

Nature of the Tax
Podatok Na dodanu Vartist (PDV).
Tax Rate
20%
Reduced Tax Rate
A zero tax rate applies to exports and international transportation services, books and notebooks for students, goods for disabled people, authorized medicines and medical instruments, as well as other goods that the government declares to be essential.
Other Consumption Taxes
Excise tax on alcohol, tobacco products, petrol and some other fuels, jewelry and luxury articles.
 
Find Tax Professionals in Ukraine on GlobalTrade.net.
 

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Corporate Taxes

Company Tax
25%
Tax Rate For Foreign Companies
Foreign companies in the Ukraine are taxed on the same basis as Ukranian companies.
Capital Gains Taxation
Capital gains are treated as ordinary income and taxed at the standard corporate tax rate of 25%.
Main Allowable Deductions and Tax Credit
Most expenses incurred relative to the activities of the company are deductible for tax purposes. However, some expenses such as contract penalties are not deductible.
Other Corporate Taxes
- Tax on pollution (variable rate);
- Tax on royalties, and rents relative to natural resources (variable rate);
- Property tax (variable rate).

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Individual Taxes

Tax Rate

Personal income tax Flat rate of 15%
Allowable Deductions and Tax Credit
There are deductions for donations to Ukrainian charities, for professionals of secondary and higher education and their families. Also for insurance premiums - long term voluntary life assurance, and self-funded retirement schemes.
Special Expatriate Tax Regime
Expats / nonresidents individuals are subject to a 30% on their revenues from Ukrainian sources.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of treaties signed by Ukraine
Withholding Taxes
Dividends: 15%, Interest: 15%, Royalties: 15%. These rates may be lower in the case of a tax treaty with Ukraine.

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Sources of Fiscal Information

Tax Authorities
State tax administration of Ukraine
Ukraine Customs
Other Domestic Resources
PriceWaterhouseCoopers report on taxation in Ukraine

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Find more on GlobalTrade.net about Taxes and Accounting in Ukraine.
 

Intellectual Property

National Organizations
The State Department of Intellectual Property. Since 1993, Ukraine has promulgated 5 laws relating to intellectual property rights in order to protect inventions, industrial designs, trademarks, industrial equipment and author's copyright against any fraud. Software and video recordings can obtain exclusive rights in conformity with articles 18 and 19 of the law protecting intellectual property rights in Ukraine. There is not yet any law against transgressions or counterfeiting on trademarks. According to the Ukrainian Patent Office, there are no statistics relating to the piracy of books, video recordings or computer software, although duplicate copies of videos, cassettes or CDs are largely and easily available in the stores and in the streets of big urban conglomerations.
Ukraine is legally committed to protecting intellectual property, but the enforcement of this protection is inadequate. Ukraine is a member of the World Intellectual Property Organization. The country is also a member of the Paris Convention (industrial property) and the Universal Convention for authors' copyright. In 1995, Ukraine adhered to the Berne Convention. Ukraine is also a member of the International Convention for authors' copyright, and of the Madrid Agreement (registration of trademarks) and the Patent Co-operation Treaty.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patent Cooperation Treaty (PCT)
Strasbourg agreement Concerning the International Patent Classification
Trademark
 
Law n° 3689-XII of 15 December 1993 on the protection of trademark rights for goods and services
Trademark law treaty
Nice agreement
Protocol relating to the Madrid Agreement
Copyright
 
http://www.uacrr.kiev.ua/
Ukrainian copyright agency Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models
 
http://www.ukrpatent.org/en/index.html
Ukrainian industrial property institute  

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Legal Framework

Independence of Justice
The judiciary is not totally independent in Ukraine. Judges are often penalized for independent decision making, and there is significant evidence of routine interference in judicial decisions by the government.
Equal Treatment of Nationals and Foreigners
Foreign nationals cannot expect an impartial trial from the country's judicial system.
The Language of Justice
The judicial language used in the country is Ukrainian and Russian.
Recourse to an Interpreter
Having an interpreter is possible.
Sources of the Law and Legal Similarities
The main source of the law is the constitution of 1996. The country's legal system is based on a civil law system and judicial reviews of various legislative acts.
Checking National Laws Online
Ukrainian legislation
 
Find Legal Experts in Ukraine on GlobalTrade.net.
 

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Standards

National Standards Organizations
National standards agency
Integration in the International Standards Network
In 1996, the ISO 9000 standards were adopted as national standards.
The Ukrainian government's decree of 1994 imposed a compulsory certification for all products imported into Ukraine. This decree lays down the list of goods subject to certification and adjusts the certification procedures. The certificates can be produced in two ways: on the one hand, there is an acceptance certificate allowing foreign certification, while, on the other hand there is a certificate of conformity published by a certified Ukrainian agency. This decree says that certificates produced by foreign and competent authorities must be issued by a foreign country which adheres to the same Treaties as Ukraine.
The competent Ukrainian mechanism for certification called the Ukrainian State Committee on Standards, Certification and Metrology - Ukr Standard, in Ukraine, has a network of 93 certification subsidiaries and laboratories over the entire country.
Classification of Standards
Classification of Ukrainian standards
Certification Organizations
"UKRSEPRO" system.
Certification services.
National Center for standardization, certification and problems of quality.
The State Committee of Ukraine for Technical Regulation and Consumer Policy.

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Business Practices

General Information
Opening Hours and Days
Offices open at 9 am. The work day starts at 9am and ends at 5pm, from Monday to Friday.
Weekly resting days are Saturday and Sunday.
 

Public Holidays

New Year January 1st
Orthodox Christmas January 7th
Day of International Solidarity of Workers May 1st
Day of International Solidarity of Workers. May 2nd
Victory Day. May 5th.
Day of the Holy Trinity May 30th
Holy Trinity. June 7th.
Constitution Day June 28th.
Independence Day. August 24th.
 
Holiday Compensation
If the public holiday falls on a Saturday or Sunday, Ukrainian legislation provides for a holiday on the Monday.

If a public holiday falls on a Thursday, then it is possible to have an extended weekend: the Friday could be a day off.

 

Periods When Companies Usually Close

New year's vacation from December 31st to January 8th (sometimes 14th).
Summer vacation Generally July or August depending on the company.
 

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Experts Views (3)
  • Handling Disputes with Ukrainian Tax Inspection

    Many unfortunate companies have experienced an inspection by the Ukrainian tax authorities, and most of them did not know what to expect, their legal rights, or the possible results.

    Frishberg & Partners on 7 Mar 2013 related to Taxes and Accounting in Ukraine

  • Ukrainian Accounting

    Investor considerations In principle, local accounting standards should not contradict international accounting standards. In practice, there are gaps between the two and separate books may be required. JSCs are subject to an annual audit requirement and must publish their annual financial statements. This is...

    A&T Consulting on 21 Feb 2011 related to Taxes and Accounting in Ukraine

  • Statements under IFRS

    Nowadays Ukrainian companies often have to deal with the problem of subjectivity during verification of their accounts under IFRS standards.

    IBcontacts on 10 Jan 2011 related to Taxes and Accounting in Ukraine

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