Tax "holidays" for payers of income tax in Ukraine | News Flash

Meet of the following criteria:

• Formed in accordance with the law after January 1, 2017;
• Acting, which for three previous consecutive years (or during all previous periods, since when they were formed less than 3 years ago and declared  annual income does not exceed 3 million and whose average number of employees during that period ranged from 5 to 20 people;
• Have been recorded as a payer of a single tax in accordance with legislation till  January 1, 2017 and who for the last calendar year revenues from sales of products (goods and services) amounted to three million and average number of employees amounted from 5 to 50 people.

However, if taxpayers applying a zero rate of income tax in any reporting period achieved performance on the revenue, or the average number of average wages of employees, of which at least one does not meet the criteria set out in subsection p.44 4 of section XX TCU, these taxpayers are required to tax income earned in this reporting period, at the rate established p.136.1 art.136 TCU (18 %).

Note that these «holidays» cannot be used by companies that:

• Created after January 1, 2017 through reorganization (merger, joining, separation, transformation), privatization and corporatization;
• Provide:
  •  Activities in the field of entertainment as defined in Article 14 p.p.14.1.46 p.14.1 TCU;
  • Production, wholesale, export and import of excise goods;
  • Production, wholesale and retail sale of fuels and lubricants;
  • Extraction, production and manufacturing of precious metals and precious stones, including organogenic;
  • Financial and insurance activities;
  • The activities of currency exchange;
  • Production and sale of minerals of national importance;
  • Real estate transactions;
  • Postal and courier activities;
  • The activities of the organization bidding (auction) products of art, collectibles or antiques;
  • Activities to provide services in the field of television and radio under the Law “On Television and Radio”;
  • Security activity;
  • FEA (except for activities in the field of information);
  • Production by tolling;
  • Wholesale trade and intermediary in wholesale trade;
  • Activities in the production and distribution of electricity, gas and water;
  • Activities Legal and accounting;
  • Activities in the field of engineering.

Taxpayers specified in paragraphs “a”, “b”, “c” of this paragraph PCs that carry the accrual and payment of dividends to its shareholders (owners), account for and bring the budget down payment of tax in the manner prescribed by Article p.57.11.57 computer and pay income tax at a rate of 18% tax for the reporting period in which the calculation was carried out and payment of dividends.