 |
Co-authored
by
Andrii Kuleba
(Junior
Associate of
Lavrynovych & Partners Law Firm)
|
On
2 August
2014 the
Act
of
Ukraine
dated 4
July
2014
No. 1588-VII
on
amending certain laws
with
regard
to
the
taxation
of
passive
income
entered
into force.
The
main novelties introduced by the Act are as follows:
- Interest,
irrespective of its amount, is
subject to personal income tax (PIT). Previously, only the interest
over UAH 20,706.00 per year was
chargeable to PIT.
- Interest
accrued on bank
accounts used
exclusively for
the payment of salaries is not within
the charge to PIT.
- Interest
is taxed at a PIT flat rate of 15%.
A progressive rate of PIT (15%,
20% and 25%)
is no more applicable.
- PIT
on interest
and dividends
is withheld by the paying entity (tax
agent). The taxpayer is not supposed to file an annual tax return.
- Tax
agent does
not disclose
the information
on a
taxpayer and
the amount
of his/her
bank deposit
in a
tax computation
(return) to be filed with
the tax
authority with
respect to
the accrual
of the interest.
- There
is a possibility to adjust a PIT liability
in case
of the
recalculation of the interest caused by the early
termination of
the bank
deposit agreement.
- Dividends
are taxed at a 5% rate of PIT on a
regular basis. Formerly, the application of the 5% rate was only
possible over a
transitional period ended 1 January 2015. After this date a
progressive tax rate (15%, 20% and
25%)
was expected to operate.
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