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Tax and Finance

Tax rarely determines whether an investment happens, but it routinely determines what it returns. We advise on the tax consequences of investing into, operating in and exiting Ukraine.

Overview

Ukraine's tax system is not unusually complex by regional standards, but it is enforced with growing sophistication. Beneficial ownership is tested, permanent establishment is asserted more readily than it once was, transfer pricing documentation is examined, and the tax authority increasingly reads a transaction against its substance rather than its form.

We advise on the tax dimension of investment and operation: how profits are repatriated and at what cost, whether a treaty rate is realistically available, when an arrangement creates a taxable presence, and how related-party dealings should be priced and documented. Where a position is challenged, we handle the audit and, if necessary, the appeal.

Typical situations

A parent company wants to know the effective cost of repatriating profit from its Ukrainian subsidiary.
The tax authority has denied a reduced treaty rate on royalties on beneficial ownership grounds.
A foreign company with remote staff in Ukraine needs to know whether it has created a permanent establishment.
Related-party pricing has never been documented and a controlled transactions report is overdue.
An assessment has been issued and the deadline for administrative appeal is running.

Scope of work

What we do

The matters we handle within this practice. Engagements are usually a combination of several of them rather than a single item.

Investment structuring

Tax modelling of the route into Ukraine, including withholding tax on dividends, interest and royalties, and the cost of exit.

Treaty relief

Application of double taxation treaties, beneficial ownership analysis and the documentation required to support a reduced rate at source.

Permanent establishment

Assessment of PE risk arising from personnel, agents, construction sites and remote arrangements, and mitigation where the risk is real.

Transfer pricing

Controlled transaction identification, benchmarking, local file preparation and the annual controlled transactions report.

CFC compliance

Controlled foreign company reporting for Ukrainian resident owners, adjusted profit computation and exemption analysis.

VAT and customs

VAT treatment of cross-border supplies and services, refund procedures, and customs valuation and classification issues.

Employment taxes

Payroll structuring for expatriate staff, tax residency determination and social contribution obligations.

Tax disputes

Representation during audits, objections to assessment notices and litigation before the administrative courts.

How we work

From first call to completion

A predictable sequence with a written output at each stage, so that you always know the position and what it will cost to reach the next one.

Fact-finding

We establish the actual flows, contracts and people involved rather than the intended structure on paper.

Analysis

A written position on the tax treatment, the strength of it, and where the exposure lies if it is challenged.

Implementation

Contract amendments, documentation and filings that put the position on a defensible footing.

Defence

Audit support, objections and litigation where the position is tested.

Why clients instruct us

Local knowledge, international standards

We work the way our clients' in-house teams and international counsel expect: clear scope, written advice, English-language reporting and no surprises on fees.

Advice in English, drafted to be usable by a board that does not know Ukrainian law.
Fee estimates agreed before work begins, with fixed fees where the scope allows.
A named partner responsible for the matter, not a rotating team.
Practising in Ukraine since 2003, through every regulatory cycle since.

Questions

Frequently asked

What is the withholding tax on dividends paid out of Ukraine?

The domestic rate is fifteen per cent. Double taxation treaties commonly reduce it to five or ten per cent depending on the shareholding, but the reduced rate is available only where the recipient is the beneficial owner of the income. A conduit company that passes the dividend straight on will not qualify.

Do I create a permanent establishment by hiring remote staff in Ukraine?

Possibly. A PE can arise where personnel in Ukraine habitually conclude contracts or play the principal role leading to their conclusion, and the analysis looks at what people actually do rather than their job titles or contract form. Engaging individuals as independent contractors does not by itself avoid the issue.

What are the transfer pricing thresholds?

Documentation obligations arise where the taxpayer's annual income exceeds the statutory threshold and the volume of transactions with a particular related or listed counterparty exceeds the transaction threshold. Transactions with counterparties in listed low-tax jurisdictions are controlled irrespective of relationship. Thresholds are indexed, so they should be checked against the current year.

How long does a tax dispute take?

Administrative appeal is measured in weeks. Court proceedings through first instance, appeal and cassation commonly take eighteen months to three years. Because assessed amounts are not collected while an appeal is pending, the timeline is often less damaging than it appears — but interest and the reputational effect of an open dispute are real considerations.

Discuss your matter with us

Tell us what you need to achieve in Ukraine. The first consultation is free and confidential — we will tell you candidly whether we are the right firm for the task.

Request a consultation +38 044 240 75 10