Peculiarities of the tax system in Ukraine
Ukraine’s tax system includes three main subsystems:
- subsystem of taxation of legal persons;
- subsystem taxation of individuals;
- state trust funds fees.
According to the legislation tax payments are divided into two groups:
- national taxes and fees;
- local taxes and fees.
National taxes and fees
The main national taxes and fees include:
- company income tax - 18%;
- personal income tax – 18%;
- value-added tax - 20%;
- social tax - from 36,76 до 49,7% of payroll fund (depending on the class of risk);
- excise tax;
- fee for the first registration of a vehicle;
- environmental tax;
- customs duty;
- land fee.
Local taxes and fees
Local taxes and fees procedure is set by rural, village and city councils. Local taxes and fees include:
- property tax, different from land fee;
- single tax;
- charge for certain types of business activities;
- vehicles parking fee;
- tourist tax.
Simplified tax system
Simplified taxation system in Ukraine gives the right not to pay a lot of taxes and fees that makes the bookkeeping easier. The simplified tax system (single tax) can be used both by individual entrepreneurs and resident entities. According to changes the simplified tax system is divided into four groups:
- Group 1– individual entrepreneurs who do not use hired labour, exclusively retail goods from trading places on markets and conduct business activity to provide public services. The volume of income during the year does not exceed 300 000 UAH.
- Group 2– individual entrepreneurs who employ less than 10 persons and the amount of income is 1,5 million UAH, that conduct business activity to provide public services, including household (to single tax payers and population), production and sale of goods, restaurant business activity.
- Group 3–individuals and legal persons and the amount of income does not exceed 5 million UAH.
- Group 4– agricultural producers, whose share of agricultural goods production for the previous tax year is equal to or greater than 75%.
Single tax payers who belong to the third or fourth group, have the right to choose the single tax of 5% of income without VAT or 3% of revenue with VAT.
Tax basis, tax rates of single contribution:
Customs duty, its taxpayers and dutiable goods
Dutiable goods are:
- goods, the customs value of which exceeds the equivalent of 500 euros, goods that are imported into the customs territory of Ukraine or exported outside the customs territory of Ukraine by enterprises;
- goods imported (sent) to the customs territory of Ukraine in the amount taxable by customs payments in accordance with Article 234 and part XII of the Customs Code, and also parts V and VI of the Tax Code of Ukraine;
- goods, vehicles realized in accordance with Article 243 of the Customs Code.
The basis of duty taxation of goods transported across the customs border of Ukraine is:
- goods for which the law sets ad valorem tax- the customs cost of goods;
- goods for which the law sets specific tax - the quantity of such goods is in set by law units.
Besides the duty, declaring goods in an appropriate customs regime a person has to pay the value added tax (VAT) (20%) and in cases prescribed by law, an excise duty if these are excisable goods.