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Taxes in Ukraine for IT business or why Ukraine is a country for IT professionals

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If you are an IT professional and you choose your country of residence based on the following factors:

  • the size of the tax rate for IT activities;

  • the average cost of living (flat rent, property value, price level, cost of utilities, etc.);

  • ease of obtaining a residence permit.

Ukraine can then be one of the top options for relocation and work.

The choice of how to legalize your stay in Ukraine depends on who you plan to work with.

If you plan to work with foreign contractors, just living in Ukraine, it is better to choose the option of obtaining a residence permit through the registration of the company. Work either through the same firm or through a registered sole proprietorship, or properly organize your stay in the country, so you do not have to pay taxes here.

If you plan to work for the Ukrainian company you have two options depending on the terms and conditions offered to you by your Ukrainian employer:

  • If the employer is willing to sign a contract of employment with you - you can get a residence permit in Ukraine through the registration of the MST;

  • If the employer wants to work with you as a sole proprietorship (and this is the most common scheme in the IT business in Ukraine), then the sole proprietorship is registered for you, and the residence permit is obtained through the company registration.

Important! If we stop at the option of sole proprietorship and work in Ukraine - it is possible to issue a permanent residence permit for an IT specialist. The advantages of such solution are:

  • No tying to a particular place of work - you will be free to choose the place of business or work as a sole proprietorship;

  • Long-term permit - permanent residence permit is issued for 10 years with possible extension.

But it takes a long time to obtain one.

Related article: Terms and conditions of obtaining a residence permit in Ukraine for citizens of America and Europe

What taxes will IT specialists pay in Ukraine in 2022?

Work in IT activities can have two possible taxation regimes:

  • 18% personal income tax and 1.5% military tax if the professional is employed as an employee (these taxes are paid by the employer). In addition, the employer pays 22% UET on each employee;

  • 5% as the rate of Single tax for the 3rd group if working through a sole proprietorship (FOP).

Can a foreigner work in Ukraine at the rate of 5% by having an FOP in Ukraine?

The answer is: He can. A foreign It-specialist can open a FOP for himself and work at the rate of 5%, for example, while he is waiting for his permanent residence permit.

If you are planning a move to Ukraine in the near future, contact our experts. We will find the best option for you and help make it a reality.

You can find out our fees here.

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