Get free access to
Our legislation updates make it easy for you to keep on top of the latest changes affecting your business. Receive our articles, opinions, tips, industry news, country profiles, regional overviews and studies, latest events and even more, directly into your mailbox.
Check out our Newsroom to see what is included!
We will send you only relevant information we consider may be of your interest and treat your personal data in compliance with our Privacy policy and GDPR statement.
Unable to subscribe? Try this page.
The reduction of the authorized capital is an ordinary procedure for the legal entities. Generally speaking, the capital reduction is the process of decreasing a company´s shareholder equity through share cancellations and share repurchases. The reduction of capital is done by companies for numerous reasons including increasing shareholder value and producing a more efficient capital structure.
But, what are the consequences? We have summarized in this article the tax treatment after a capital reduction in Ukraine:
If the share capital of the legal entity income tax does not arise.Thus, in the case of reducing the share capital, section III of the Tax Code of Ukraine provided the adjustment of financial result before tax for the difference, including when leaving one of the founders / participants.
Not taxable payment of share dividends and share capital in cash and VAT (pp. 196.1.6 TCU).
If a member / founder is a natural person, in this case, there is no taxable income, if there is a reduction of share capital, return of share of participants / founders of the cost previously made their contributions. It occurs only in case of alienation of corporate rights ( selling them to another person).
About Accace
Accace is a proactive consultancy and outsourcing partner who bridges the gap between needs and solutions. Combining smart and streamlined technology with a holistic approach, we provide an all-round care to clients and consider their matters as our own. With over 800 experts and approximately 2,000 customers, we have vast experience with facilitating the smooth operation and growth of small to large-scale, global businesses.
About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 60 jurisdictions with more than 7,000 professionals, we support over 80,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 800,000 pay slips globally.
