Choosing a tax system in Ukraine

General corporate income tax

The standard corporate income tax rate is 18% of taxable profit. Accounting profit is the starting point, subject to Tax Code adjustments. This route often suits businesses with meaningful deductible costs, complex transactions, investment, or revenue above the simplified-system limit. The State Tax Service publishes the current rules.

Third-group single tax

Eligible legal entities may use third-group single tax: generally 5% of revenue without VAT or 3% of revenue plus VAT. The tax applies to receipts, not profit. An annual income limit and prohibited-activity rules apply; for 2026, the limit is tied to 1,167 minimum salaries.

This route can be simple for a high-margin service company. It can be a poor fit for trading or manufacturing because expenses do not reduce the tax base.

Diia.City taxation

An eligible technology company admitted to Diia.City may stay on ordinary corporate income tax or elect the special 9% tax on specified distributed-profit and equivalent transactions. The regime also changes the framework for employee and gig-specialist taxation, but brings activity, income, team, remuneration and reporting tests. Read the Diia.City founder guide before treating it as a tax shortcut.

Prepare a twelve-month forecast with revenue, direct costs, payroll, contractor payments, imports, exports, capital purchases and expected profit. Then compare total tax and administration under each eligible route.

• Will customers expect a VAT invoice?
• Is the margin high, or will most revenue pay for goods, subcontractors or equipment?
• Will annual revenue approach the simplified-system ceiling?
• Are any activities prohibited under the single-tax rules?
• Will the company pay foreign suppliers, royalties, interest or dividends?
• Does the group have related-party or permanent-establishment concerns?

A software consultancy and an importer can reach different answers at the same revenue. Model both rather than copying another founder's choice.

VAT is separate from the profit-versus-revenue choice. It affects contract prices, tax invoices, working capital and document discipline. Exported services may have a different place-of-supply result from domestic services. Review the practical VAT guide before the first contract.

Company tax is only one layer. Salaries involve personal income tax, military levy and unified social contribution. Dividends and cross-border payments have separate consequences. Follow money from the customer through costs to the amount founders can lawfully withdraw.

Tax choices are made during formation or through a separate application with deadline rules. A late or rejected application can leave the company on the general system. Keep filing evidence and verify the result in the register or electronic taxpayer cabinet; an intention on a form is not confirmed status.

1. Describe every revenue stream and customer country.
2. Forecast revenue, costs, payroll and capital spending.
3. Check the 2026 income ceiling and prohibited activities.
4. Decide whether customers or supply chains make VAT necessary.
5. Compare company, payroll, withholding and owner-level taxes.
6. Check whether Diia.City is genuinely useful and available.
7. File on time and verify the registered status.
8. Put bookkeeping and source-document routines in place before trading.

Review the model before crossing a threshold, adding an activity or signing a material cross-border contract.