This post provides a thorough overview of the individual income tax framework in Ukraine for 2025. The following information covers tax rates, assessment rules, and additional surcharges, with practical guidance on how the Ukrainian system impacts residents and those earning income from Ukrainian sources.
Individual Income Tax Rates in Ukraine
Ukraine employs a flat individual income tax rate for residents and non-residents earning Ukrainian-sourced income. In the 2025 tax year, this rate applies uniformly to most types of income.
| Taxable Item | Tax Rate (%) | Currency (UAH) |
|---|---|---|
| Standard personal income (salary, fees, etc.) | 18% | UAH |
This flat 18% tax rate is applied directly to the total taxable income, with the tax calculated on all income received within Ukraine’s jurisdiction.
Surtaxes and Special Categories
In addition to the standard flat rate, Ukraine applies certain surtaxes to specific categories of income in 2025:
| Type | Rate (%) | Conditions |
|---|---|---|
| Military Tax | 5% | All taxable personal income for individuals, effective from 1 December 2024 (previously 1.5%; will revert to 1.5% after martial law ends) |
| Dividends from non-residents, mutual investment funds, and non-CIT payers in Ukraine | 9% | Applies to dividends distributed by non-residents, mutual funds, or entities that do not pay corporate income tax (CIT) in Ukraine |
| Dividends from resident CIT payers (except mutual investment institutions) | 5% | Applies to dividends paid by Ukrainian companies that are CIT payers (excluding mutual investment institutions) |
Be aware that the higher military tax rate of 5%, introduced from December 2024, is a temporary measure that will revert to the previous 1.5% rate after the cessation of martial law.
Tax Assessment Basis and Bracketing
The Ukrainian system is straightforward for 2025: income tax is assessed on a flat-rate basis, not a progressive or bracketed system. No minimum or maximum holding period thresholds are defined for income classification for tax purposes.
Summary of assessment framework:
- Flat rate: 18% applicable to most earned income
- Supplementary surtaxes as outlined above, depending on income type
- No income brackets, minimum holding periods, or stepped rates
Dividends Taxation Overview
There are specific rates for dividend income depending on the source:
| Dividend Source | Tax Rate (%) | Conditions |
|---|---|---|
| Resident CIT payers (except mutual investment institutions) | 5% | Standard rate for dividends from resident Ukrainian companies subject to CIT |
| Non-residents, mutual investment funds, or non-CIT payers in Ukraine | 9% | Higher rate for dividends from abroad or from certain Ukrainian investment vehicles |
Pro Tips: Navigating Ukrainian Individual Income Tax
- Monitor legislative updates: The military tax rate is subject to change depending on Ukraine’s legislative environment. Ensure you track official announcements from the government to adapt your compliance.
- Classify dividends correctly: Distinguish whether dividends are sourced from resident CIT payers versus non-residents or mutual investment funds, as tax implications differ significantly.
- Confirm income sources: Non-residents with Ukrainian-sourced income are subject to these flat rates and surcharges. Confirm classification of your income to avoid unexpected liabilities.
- Leverage official sources: Always cross-check information against updates from tax authorities via the official website: https://tax.gov.ua/.
Key Points for International Professionals
Ukraine’s flat-rate system for individual income tax in 2025 minimizes complexity relative to progressive systems found elsewhere. The current environment features a temporarily increased military tax and unchanged flat rates for dividend income, so classification and compliance remain top priorities for international professionals and business owners. With no income brackets or graduated rates, the system’s predictability aids in personal tax planning, but close attention should be paid to temporary measures and the precise source of all dividend income.