Comments on taxation of foreigners in Ukraine

Oct. 7, 2009 - PRLog -- Taking into consideration the recent letters of the State Tax Administration of Ukraine and the latest official answer addressed to the European Business Association it is worth to pay attention to some changes in personal income tax law interpretations by the official agency aimed to pressure foreigners in Ukraine.

Foreigners working in Ukraine have to obtain a yearly tax residence certificate in order to be taxed with 15 percent rather than with 30 percent tax rate which non-residents pay. In order to receive the tstauts as a tax resident an application must be submitted first to the tax inspection. As a result the applicant receives the tax resident certificate and is to be considered as a resident definite properly to the regulations of the State Tax Administration of Ukraine (as of 15.05.09 №4470/6/17-0716, №10018/7/17-0717; as of 12.03.2009 №2188/6/17-0716).
The rate of personal income tax on salary which applies to foreigners in Ukraine is to be mentioned in the labor contract with foreigners or in corresponding annexes. Anyhow it should be in a written from the beginning of employment. If the previous mentioned is not implemented a risk of an extra tax charge (with 30% rate) and penalties for delay of tax payments by employer could be imposed (p.9.1.13 of the Act of Ukraine “On physical persons’ income tax”).

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