What taxes does a foreign entrepreneur pay in Ukraine?

It all starts with residency

For a foreigner, the central tax question is status rather than rates. Whether you count as a Ukrainian tax resident decides which income is taxed and whether the simplified system is open to you. The definition is in subparagraph 14.1.213 of the Податковий кодекс (Tax Code). The broader picture of doing business as a foreigner is in the guide to business for foreigners.

The Code applies its tests in sequence. It looks first at whether you have a place of residence in Ukraine. If you also have a home in another country, it moves to the place of permanent residence and then to the centre of vital interests, meaning where your personal and economic ties are closer. When even that gives no answer, it counts the days you spent in Ukraine, and you are a resident if you were here for 183 days or more during the tax year.

Separately, the Code lists sufficient grounds for residency. One is determining your main place of residence in Ukraine yourself, in the manner the Code sets out. Another is registering as a self-employed person, that is as an entrepreneur. So registering as an FOP in itself makes you a tax resident. Holding e-resident status does not count.

What this means for your income

Paragraph 162.1 of the Code provides that a tax resident pays personal income tax on income from Ukrainian sources and on foreign income alike. A non-resident pays tax only on income whose source is in Ukraine.

In other words, a foreign tax resident who receives income from abroad has to declare it in Ukraine. If the same income has also been taxed abroad, international treaties come into play.

Double taxation

Ukraine has double taxation treaties with many countries. Article 103 of the Code explains how they apply to a non-resident's Ukrainian-source income, through exemption, a reduced rate or a refund of overpaid tax. To use a treaty, the non-resident confirms their residence in the other country with a document from its tax authority. Check whether a treaty exists with your country before you start work.

Employees

When a foreigner works under an employment contract, the employer withholds tax from their salary as tax agent. Personal income tax of 18% and the military levy of 5% come out of the salary. The employer also accrues the єдиний соціальний внесок (single social contribution) of 22% at its own expense and reports on the payments. For all of this it needs the employee's tax number. How an employer takes on a foreigner is explained in the article on employing a foreigner.

Individual entrepreneur (FOP)

A ФОП (individual entrepreneur, FOP) chooses between the general system and the simplified one. Paragraph 291.5 of the Code bars non-residents from the єдиний податок (simplified single tax) in groups one, two and three. At the same time, registering as an entrepreneur is itself a sufficient ground for residency. An FOP can be registered without a residence permit, but it rarely pays off, because such an entrepreneur will most likely not meet the residency tests and will not be able to stay on the single tax. In practice the question comes down to reviewing all your circumstances with an accountant.

Every single tax group restricts the types of activity, staff numbers, income and counterparties. The 2026 rates and limits are as follows:

LLC (TOV)

An LLC pays tax as a legal entity under either the general or the simplified system. A foreign founder receives income as dividends, from which tax is withheld. If the founder is a non-resident, double taxation treaties may apply. A foreign director is paid a salary like any other employee. Setting up a company is explained in the article on opening an LLC.

Declaring your income

A tax resident who has received income from which no tax agent withheld tax, foreign income included, files an annual return of property and income. The return also shows tax paid abroad, where the double taxation treaty allows it to be credited. Filing and payment deadlines are set by the Code, and they belong in your calendar from your first year in Ukraine.

Military levy and contributions

Besides income tax, most personal income in Ukraine is subject to the військовий збір (military levy). On salaries it is withheld at 5%. Entrepreneurs in groups one and two pay a fixed levy of UAH 864.70 a month, and those in group three pay 1% of income.

Employers and entrepreneurs separately pay the single social contribution under Law No. 2464-VI. An employer accrues 22% on top of salaries, while the minimum an entrepreneur pays for themselves in 2026 is UAH 1,902.34 a month. Rates and bases for these payments have changed in recent years, so check them at the start of each year.

Taxes and migration status

Tax discipline also affects migration matters. The Law 'On Immigration' lists unmet property obligations to the state among the grounds for refusing an immigration permit. Settle any tax debts before you apply for ПМЖ (permanent residence). The grounds for refusal are covered in the article on refusal of an immigration permit.

Tax number

Without a податковий номер (individual tax number, IPN), a foreigner can neither work officially nor run a business. You get it at the tax office in person or through a representative holding a notarised power of attorney. The details are in the article on getting a tax number as a foreigner.

Lawyer's experience

Foreigners most often underestimate the residency question. They register as an FOP and work with foreign clients without realising that they may already be Ukrainian tax residents with a duty to declare their worldwide income. So I advise discussing residency with an accountant before registration.

My second piece of advice concerns double taxation treaties. They only work once your residency is confirmed by a document. Getting that document in advance is easier than proving your right to relief after the tax has been assessed.

If you still need a tax number, we arrange a tax number for foreigners as the first step.

Frequently asked questions