Country - Ukraine

• 25% advance corporate profit tax must paid prior to, or at the same time as, the payment of dividends (the amounts of advance corporate profit tax may be offset against taxable income during the reporting period for the remittance or in subsequent reporting periods if losses have been incurred in the initial reporting period); and
• 15% withholding tax, unless the relevant double taxation treaty provides for a lower rate.

The VAT paid on the purchase of real estate is deductible if the real estate is subsequently used in activities which involve VAT.

Other taxes on the possession of real estate
According to the law "On Payment for Land" landowners pay land tax and land users make lease payments. The land tax payable is a percentage of the monetary value of the land or is a set amount per sq.m depending upon the location of the land.

Land tax paid is deductible for  corporate profit tax purposes.

2.  Investment through a permanent establishment

Minimum capital 
Not applicable.

Set-up costs 
The accreditation fee for a representative office of a foreign legal entity is USD 2,500.

There will also be other associated costs, for example the translation of documents into Ukrainian, apostille (certification of documents), notarial fees, etc.

Time required to become operative
Approximately two months.

Costs per annum for corporate and accounting compliance
Tax and accounting compliance costs depend on the outsourcing company used and the volume of transactions.

Corporate governance
Not applicable.

Regulatory control 
Not applicable.

Taxation of current income of foreign corporations in Ukraine
The income of a foreign legal entity doing business through a permanent establishment is taxable at the 25% rate of corporate profit tax.

Taxation of distribution of current income to investors
Once profits are taxed in Ukraine, they can be transferred by the permanent establishment to the foreign head office without further taxation. Ukrainian tax authorities take the position that if the profits are repatriated by a permanent establishment whose head office is in the country with which Ukraine has not concluded a double tax treaty, such profits will be subject to a 15% withholding tax notwithstanding the ordinary corporate profit tax paid by the permanent establishment.

Taxation of capital gains 

Sale of a real estate asset
15% withholding tax is applicable to certain types of non-operating income (including capital gains derived from the sale of immovable property) unless otherwise provided by a relevant double tax treaty.

3. Real estate transfer duties  

• 1% state duty (derzhavne myto);
• 1% pension fund duty (pensiynyi zbir) (not payable on the sale and purchase of land).

• Opening a temporary bank account for transferring at least 50% of the charter capital takes one day.
• Registration in the state register of legal entities takes four business days.
• Registration with the tax authorities, social funds and statistics committee takes seven to 10 business days.
• It may also be necessary to notify the anti-monopoly authorities that the company has been established. The official period for obtaining anti-monopoly approval is 30 to 90 days.

• basic rental income is subject to 20% VAT;
• input VAT is offset against the amount of output VAT;
• rental income is regarded as taxable income for corporate profit tax purposes.

• 25% advance corporate profit tax being paid prior to, or at the same time as, the payment of dividends (the amounts of advance corporate profit tax may be offset against taxable income in the reporting period for the distribution or in subsequent reporting periods if losses are incurred in that initial reporting period). Companies which receive more than 90% of their profits in the form of dividends do not pay advance profit tax; and
• A 15% withholding tax applies unless a double tax treaty provides for a lower rate.

• Registration in the state register of legal entities takes four business days.
• Registration of shares takes up to 45 days from the date of submission of all required documents.
• Registration with the tax authorities, social funds and statistics committee takes seven to 10 business days.
• It may also be necessary to notify the anti-monopoly authorities that the company has been established. The official period for obtaining anti-monopoly approval is 90 days.