The issue of taxation for Ukrainians who ended up abroad due to the war is becoming more and more urgent. Many of our citizens were forced to look for work in other countries, open a business, engage in freelancing, or simply receive financial support in the form of charitable assistance. At the same time, the state continues to monitor the fulfillment of tax obligations of all Ukrainian citizens, regardless of their place of stay. The main questions that concern many people are: is it necessary to pay taxes in Ukraine if the income is received abroad? How to avoid double taxation? Is conscription compulsory? And what will happen to those who already work abroad, but did not submit a declaration?
As noted People’s Deputy of Ukraine, Chairman of the Committee of the Verkhovna Rada of Ukraine on Tax and Customs Policy, Honored Economist of Ukraine Nina Yuzhanina, the State Tax Service reminded that all Ukrainians who receive income outside the country must submit an income declaration and pay taxes in Ukraine.
According to her, any earnings received abroad are subject to taxation at the standard rate: 18% personal income tax (PIT) and 1.5% military duty (until January 1, 2025). If income is received in foreign currency, it is converted into hryvnias at the official rate of the NBU on the day the income is accrued.
Yuzhanina informed that if a citizen of Ukraine has already paid taxes abroad, it is not necessary to pay them again in Ukraine itself. However, this rule applies only if the country in which the Ukrainian works has an agreement with Ukraine on the avoidance of double taxation. At the same time, she emphasized that regardless of the existence of such an agreement, the military duty of 1.5% must be paid.
According to Yuzhanina, in order to avoid double taxation, a citizen of Ukraine must take several important steps:
- Get a certificate from the tax office of the host country about the taxes paid.
2. Legalize this document in a relevant foreign institution – it can be a consulate or other bodies authorized to legalize such documents.
3. Submit documents to the Ukrainian tax service.
At the same time, the deputy drew attention to an important nuance – only the amount that does not exceed the tax that would have to be paid in Ukraine is taken into account. That is, if the tax rate is lower in another country, the difference will still have to be paid in Ukraine.
In addition, Yuzhanina reported that the tax declaration must be submitted by May 1. However, if at the time of submitting the declaration, the citizen does not yet have supporting documents about the payment of taxes abroad, he can apply to the tax office at the place of registration and postpone the deadline for submitting the declaration to December 31. At the same time, Ukrainians who received temporary protection abroad due to the war have various obligations regarding the declaration of their income. It is not necessary to submit a declaration and pay taxes if a citizen of Ukraine received monetary or humanitarian aid from foreign governments or charitable foundations.
At the same time, it is necessary to submit a declaration if the citizen had other income – for example, worked under an employment contract, was engaged in freelance work or received profit as an entrepreneur, even if at the same time he received charitable assistance.
However, Yuzhanina asked a question to which the government currently has no answer:
“Given that thousands of Ukrainians are already employed abroad or have opened a sole proprietorship in the host countries, how will the Ukrainian tax office involve them in submitting declarations!?”.
