However, if taxes were already paid abroad, you can avoid double taxation provided there is a relevant agreement between Ukraine and the foreign country.
Below is an overview of the rules, procedures, and key steps to ensure you comply with Ukrainian tax laws while working abroad.
1. Who Must Declare Income Earned Abroad?
All Ukrainian citizens receiving foreign-sourced income must file a declaration in Ukraine. Regardless of where you work, your global income is subject to tax obligations at home, unless an applicable double taxation treaty provides relief.
2. What Taxes Apply?
- Personal Income Tax (PIT)
- 18% on the taxable amount.
- Military Duty
- 1.5% applies to income received before January 1, 2025.
- After that date, the military duty might no longer be collected, pending legislation updates.
If your foreign income was in another currency, convert the income into Ukrainian hryvnia (UAH) at the official NBU rate on the date the income was accrued.
3. Avoiding Double Taxation
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Check for a Double Taxation Treaty
- Ukraine has concluded agreements with a number of countries to avoid double taxation.
- If taxes were already paid abroad, you may not need to pay the same amount again in Ukraine, subject to treaty conditions.
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Document Foreign Taxes Paid
- Obtain an official certificate from the foreign tax authority confirming the tax amount paid.
- Legalize this certificate (e.g., through the consulate or any other valid procedure) for use in Ukraine.
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Credit Amount
- Ukraine will credit taxes paid abroad up to the level of Ukrainian tax due.
- Examples:
- If your Ukrainian liability is UAH 80,000 but you already paid the equivalent of UAH 100,000 abroad, you owe nothing more in Ukraine.
- Conversely, if you paid UAH 80,000 abroad but your Ukrainian tax is UAH 100,000, you only pay UAH 20,000 extra.
4. If You Lack Proof of Foreign Tax Payments
- Option to Defer Declaration
- Submit an application to your local Ukrainian tax office to extend the filing deadline until December 31.
- Use this extra time to secure documentation of the taxes paid abroad.
5. Charitable Assistance vs. Other Income
- Monetary or Humanitarian Aid
- If you received temporary protection in a foreign country and got charitable assistance from governments or foundations, you do not need to declare or pay taxes on that assistance in Ukraine. - Other Earnings
- If you also had salary or freelance income, you must still include those earnings in your Ukrainian tax return, regardless of receiving charitable help.
6. How to File a Declaration from Abroad
You can submit your income declaration in one of two ways:
- By Mail
- Send documents no later than 5 days before the filing deadline.
- Electronically
- Use Ukraine’s electronic document management system to file from anywhere with internet access.
Key Takeaways
- Declare All Foreign Income: Ukrainian tax law requires you to report global earnings.
- Check Treaties: A valid double-taxation agreement can spare you from paying taxes twice.
- Keep Records: Proper documentation is crucial—secure official certificates of foreign tax paid, and legalize them if needed.
- Mind the Deadlines: Know the annual filing requirements and procedures for deferrals.
By following these guidelines, Ukrainians working abroad can fulfill their tax obligations while avoiding double taxation, ensuring compliance with Ukrainian law and securing their financial standing.
