Specialists of the State Tax Service explained how foreign income is declared and taxed

If Ukrainian officially works and pays taxes at the residence place abroad, there is no need to pay them again. Amounts of tax paid abroad will be credited in Ukraine to reduce the personal income tax liability. This was informed by acting Head of the State Tax Service Lesya Karnaukh on the Facebook page.

“Not all foreign income is subject to taxation and declaration! Ukraine has agreements with many countries of the world on the avoidance of double taxation. Therefore, we kindly ask every Ukrainian abroad not to panic” – Lesya Karnaukh emphasized.

According to her, there is no need to declare funds and pay taxes in Ukraine if individual resident of Ukraine received: 

- material assistance from foreign states, state funds or charitable organizations in connection with the war;

- assistance from foreign states, state funds or charitable organizations to the first-degree family members affected by russian aggression. 

“If other income was received abroad, for example, salary, income from the freelance work, then yes – such income must be declared in Ukraine. This can be done quite easily – through the payer’s Electronic cabinet” – noted acting Head of the State Tax Service.

Taxes already paid abroad can be credited in Ukraine. To do this, it is needed to apply for a certificate from the tax authority of another country.

It must contain the following information:

- how much tax was paid;

- from what income.

Certificate should be legalized (unless international treaty provides otherwise).

Crediting amount cannot exceed amount of tax that would have been paid in Ukraine.

Who must submit declaration? 

Residents of Ukraine, if they received income outside the customs territory of Ukraine.

Any foreign income is included in the total annual taxable income and is taxed on a general basis. 

Foreign income is taxed with:

- personal income tax – 18%;

- military levy:

- 1.5 %  – income received up to and including 31.12.2024;

- 5% – income accrued or paid from 01.01.2025.

If income is received in foreign currency or in the form of other assets, it is converted into UAH at the NBU exchange rate on the date of receipt.