How to withdraw money from Ukraine?

When expanding the area of your business to Ukraine - no matter how: through a representative office or starting a new company, the goal of any entrepreneur will be to make a profit. 

And of course, while actively working on your business in Ukraine, you will quite quickly face the question, How to profitably withdraw your earned money from Ukraine without overpaying taxes?

The optimal solution in this situation will be a tax consultation with a specialized lawyer who will develop a tax optimization strategy for your business activity. An individually designed algorithm of actions will allow you to apply it to your company without having any problems.

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Legal advice on withdrawing money from Ukraine and business taxes in Ukraine

There are many tax optimization schemes. There is no one-size-fits-all scheme that will work for everyone. This is the art of a tax lawyer - to analyze the situation, try on possible legal solutions, some of which we will describe below, and choose the one that fits perfectly.

You can see the price of tax consulting here. We have developed service packages from which you can choose the one that meet your needs in terms of scope and price.

Please note! We also offer you organization and maintenance of accounting and personnel records of your company in Ukraine. We not only entrust the accounting to an experienced accountant, but also ensure additional control, because our accountants always work in conjunction with a specialized lawyer.

Legal services for repatriation of your company income and tax optimization in Ukraine

Let’s discuss one of the most common ways to organize foreign business in Ukraine - through a subsidiary company.

Starting a subsidiary, rather than a representative office, can be the best option, for example, in order to optimize the tax burden, since LLC has more options for choosing the taxation system. Another advantage is the ability to withdraw money abroad by paying only the Single Tax or VAT on the profits of the LLC. 

If your foreign company is one of, or the only founder of the Ukrainian company, the withdrawal of funds from Ukraine is organized through the payment of dividends to the founding company. In this case you will have to pay the following taxes:

  • 18% income tax - it is paid by the Ukrainian company based on the results of financial statements; 

  • 15% tax on dividends - it is paid by the founder when transferring to the parent company the remaining amount after the previous tax is paid. Here it’s worth remembering that Ukraine has conventions with a number of countries on avoidance of double taxation, which may change this point in important ways. We will analyze your specific case and reasonably calculate the tax rate for you to avoid double taxation.

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If we are talking about the very beginning of your business activity in Ukraine, one of the possible schemes for both support of the Ukrainian company and tax optimization is a repayable interest-free financial assistance to a subsidiary company.

Such assistance is provided from the parent company to the subsidiary on the basis of an agreement for a clearly defined period. It’s worth noting that the income of the Ukrainian company can be used to return the assistance, which is not taxable.

But! The procedure for providing and returning such assistance has many subtle aspects, which we have described here. This option will not be suitable for every business. It’s not a one-size-fits-all solution to any tax case. It can be used, but only the analysis of your situation will show whether it fits you and to what extent.

We may offer you other possible schemes - work through agency or commission contracts, the withdrawal of money through the receipt of services from a subsidiary company, etc. Your optimal scheme will depend on the type of your activity, your business model, the scale of production.

Our lawyers will:

  • Analyze your situation and your vision of doing business in Ukraine;

  • Consider and select possible schemes of tax optimization when withdrawing money to the parent company;

  • Help to choose the best option;

  • Calculate the possible risks and tell you how to avoid them.

We can also facilitate your task and take over the accounting of your company in Ukraine, which will include tax consulting. Thus, you can be sure that the financial statements of your company are in absolute order and under the close control of a tax lawyer.

Do you want to correctly organize your business in Ukraine and avoid any possible problems with tax authorities? Don’t hesitate to contact us! We will not only help you solve one-time problem situations, but are ready to help you practically by providing tax and accounting services to your company.

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Publication date: 12/02/2021

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