Personal Income Tax 2026 – Ukraine

Applies to all income: salary, benefits, business income, professional earnings, foreign income, investment income. Simple flat rate - no progressive brackets. Same rate for high and low earners. Easy to calculate and comply.

Temporary war tax increased from 1.5% to 5% on December 1, 2024. Applies to same income base as PIT with few exceptions. No cap on military tax. Effective until reformation of Ukrainian Military Forces completed and confirmed by Parliament.

18% PIT + 5% military tax = 23% effective income tax rate for most taxpayers. Applies to employment income, business profits, most passive income. Higher than advertised 18% rate - important for tax planning.

Active military personnel and defense force employees pay reduced 1.5% military tax (original rate). Still pay 18% PIT. Total 19.5%. Significant benefit for those serving in armed forces.

Non-residents pay 30% withholding tax on Ukrainian-source income including employment, gambling, winnings. Applies until obtaining tax residence certificate. Significantly higher than resident rate. Exception: dividends, royalties, interest taxed at different rates.

Once non-resident obtains tax residence certificate from Ukrainian authorities, rate reduces to standard 18% PIT + 5% military tax. Same as residents. Certificate proves tax residency status during qualification period.

Dividends from Ukrainian companies paying corporate income tax: 5% PIT rate. Plus 5% military tax applies. Total 10%. Favorable rate encourages investment in Ukrainian businesses.

Dividends from non-residents, mutual funds, non-CIT payers in Ukraine: 9% PIT. Plus 5% military tax. Total 14%. Slightly higher than ordinary dividends.

Dividends not meeting 'ordinary' criteria taxed as salary: 18% PIT + 5% military tax. Total 23%. Same as employment income. Applies to certain distributions and disguised salary payments.

Bank interest and most passive income: 18% PIT + 5% military tax. Total 23%. Banks withhold at source. Exception: interest on current accounts for salaries/pensions is tax-exempt.

Capital gains from securities, forex, investment assets: 18% PIT rate. Plus 5% military tax. Total 23%. Exchange rate differences must be accounted in hryvnia, potentially creating taxable gains despite foreign currency losses.

First disposal of residential real estate per year exempt from tax if owned 3+ years. Inherited property exempt regardless of ownership period. Significant exemption for homeowners. Commercial property never qualifies.

Second and subsequent real estate sales in calendar year by tax residents: 5% PIT. Plus 5% military tax. Total 10%. Must pay before notarization of sale-purchase agreement.

Real estate sales by non-residents: 18% PIT. Plus 5% military tax. Total 23%. Higher rate than residents. Applies to all sales, not just subsequent ones.