On 23 March 2017 the Parliament of Ukraine adopted a law that cuts down the personal income tax ("PIT") rate from 18% to 9% in respect of the following types of dividends:dividends received from foreign sources; dividends distributed by Ukrainian entities that are exempt from the corporate income tax ("CIT") (e.g., mutual investment funds, payers of single tax).
The law is expected to apply retroactively from 1 January 2017 and only to the dividends received by individuals. The 5% PIT rate on dividends payable by Ukrainian entities that are subject to CIT under general terms remains intact.
The changes do not affect the military duty of 1.5%, which generally applies to income of individuals in addition to PIT. Thus the final rates will be 10.5% (9%+1.5%) or 6.5% (5%+1.5%) depending on the source of dividends received by the individual.
It is expected that the law will be signed by the President of Ukraine and will become effective on the next day following its publication.
For further information please contact Asters' partner Constantin Solyar,
associate Pavlo Shovak and junior associate Roman Podzizei.