Tax Rates in Ukraine
for Expats 2026

Income Tax — Base Rate and Wartime Military Levy

Ukraine operates a flat personal income tax system at 18% (PDFO — Personal Income Tax). Since 2024, under continued martial law conditions, an additional 5% military levy applies to earned income, bringing the effective rate to 23% for employees and self-employed individuals. This military levy replaced the previous 1.5% rate introduced early in the conflict and reflects Ukraine's fiscal response to wartime financing needs. The tax system remains fully operational despite ongoing conflict, administered by the State Tax Service of Ukraine (SFS).

Residents and non-residents with Ukrainian source income are subject to these rates. Many Ukrainian employees also benefit from an employer-paid Unified Social Contribution (USC) of 22% that does not reduce net salary — the employer bears this cost entirely, a key distinction for foreign employers hiring Ukrainian talent.

Corporate Tax

The standard corporate tax rate in Ukraine is 18%, applied to company profits. Wartime conditions have not changed the standard rate, and the tax remains a stable component of the fiscal framework administered by the SFS. The government has signaled future incentives for reconstruction investments, though these remain under development. Corporate tax residents are subject to worldwide taxation principles; non-residents are taxed only on Ukrainian-source income.

The wartime context has introduced informal deferrals and priority reviews for critical infrastructure and defense-related industries, though formal statutory incentives remain limited. Companies continuing operations in Ukraine benefit from stable statutory rates even as martial law restrictions affect foreign currency transfers and cross-border transactions.

VAT & Consumption Taxes

The standard VAT rate in Ukraine is 20%. Reduced rates apply to medicines and medical devices (7%), and exports are taxed at 0%. VAT registration is compulsory for businesses exceeding turnover thresholds; many freelancers under the Single Tax regime (Group 3 non-VAT option) are exempt from VAT. Under martial law, certain humanitarian supplies and medical imports have received temporary exemptions, though general VAT rules remain in effect.

Capital Gains & Investment Income

Capital gains are taxed at 18% (the standard income tax rate) plus the 5% military levy, totaling 19.5% effective rate. Domestic dividends are subject to a 5% withholding tax; foreign dividends face a 15% withholding tax. Investment income including interest on deposits is generally taxed at the 18% flat rate under the personal income tax system. The wartime context has introduced foreign exchange controls that affect repatriation of investment income and capital, administered through banking channels overseen by the National Bank of Ukraine.