Ukraine is one of the cheapest places in Europe to be a sole trader on paper. A registered sole trader on the single tax pays 5% of turnover plus a 1% military levy, and a fixed social contribution. An employee on the same money pays 23%.
This guide covers Ukrainian personal tax for people moving to or living in Ukraine in the 2026 tax year, which is the calendar year. Ukraine has been under martial law since February 2022. This guide covers how that affects tax and residence permits only. For entry and safety, follow official Ukrainian and home-country guidance.
The key question is simple. Will you be employed, or registered as a sole trader? The gap between the two is wider than almost anywhere else in Europe.
What's changed: the military levy on salaries and most other personal income rose from 1.5% to 5% from 1 December 2024, and sole traders in group 3 have paid a levy of 1% of turnover since 1 January 2025. For 2026 the minimum wage is UAH 8,647 a month, which sets the minimum social contribution at UAH 1,902.34 a month and the group 3 turnover limit at UAH 10,091,049. Diia City staff pay the 5% military levy too, so 10% in total on pay up to the equivalent of €240,000 a year. A bill to tax crypto and other virtual assets is still waiting for its second reading.
📋 Ukraine tax at a glance for 2026
Topic | Details |
|---|---|
Tax year | The calendar year. Returns for 2026 are due by 1 May 2027, with tax paid by 1 August 2027 |
Tax system | Worldwide income for residents |
Income tax rate | 18% flat, plus a 5% military levy. No tax-free allowance |
All-in on a US$100k salary | 23% (UAH 4.5m, single). The employer pays the 22% social contribution on top |
Sole traders (FOP) | Group 3 single tax: 5% of turnover, plus a 1% military levy and a minimum social contribution of UAH 1,902.34 a month |
Special regime | Diia City: 5% income tax plus 5% military levy for staff and gig specialists of resident IT companies |
Dividends, interest, gains | Ukrainian dividends 5%, foreign dividends 9%, interest and gains 18%, each plus the 5% military levy |
Crypto gains | No specific rules yet. A virtual assets tax bill is Proposed, not law |
Residence at a glance | Getting in: easy (a home or centre of interests in Ukraine; registering as a sole trader is enough). Leaving: you must move your home and interests, and file a return before you emigrate |
Double tax treaties | 73 in force |
US dollar figures use the National Bank of Ukraine official rate for 20 October 2026, UAH 45.0013 to US$1, rounded to UAH 45. So US$100,000 is UAH 4.5 million.
Sole trader or employee: the group 3 single tax
Why do so many Ukrainian freelancers and IT contractors work as sole traders? Because the simplified system taxes turnover at a low flat rate instead of profit at 18% plus the levy.
Image 1 — a sole trader pays about 6.5%, an employee 23%
A sole trader is registered as a fizychna osoba-pidpryiemets, or FOP. Most professionals choose group 3 of the single tax, which suits services to any client, in Ukraine or abroad. In 2026 group 3 works like this:
Single tax: 5% of turnover, or 3% if you also register for VAT.
Military levy: 1% of turnover. This rate applies until 31 December of the year martial law ends.
Social contribution (ESV): 22% of at least the minimum wage, so at least UAH 1,902.34 a month or UAH 5,707.02 a quarter. You can choose to pay on a higher base.
Turnover limit: UAH 10,091,049 a year (1,167 times the minimum wage). Turnover above the limit is taxed at 15%, and you then have to move to the general system.
No costs are deducted, so it suits people with low expenses.
Non-residents can't use the single tax, so you need to be Ukrainian tax resident. Some activities are excluded, including financial intermediation, company management, currency exchange, gambling, auditing and security services.
👉 State Tax Service: single tax, social contribution and military levy rates for 2026 (in Ukrainian)
👉 State Tax Service: the military levy for sole traders from 2025 (in Ukrainian)
👉 Tax Code of Ukraine, including Articles 291 to 293 on the single tax (in Ukrainian)
When you become tax resident in Ukraine
Ukraine doesn't start with a day count. You're tax resident, and taxed on your worldwide income, if you have a place of residence in Ukraine. If you also have one abroad, the Tax Code applies these tests in order:
your permanent home is in Ukraine
if you have a permanent home in both countries, your centre of vital interests (closer personal or economic ties) is in Ukraine
if that can't be decided, you spend at least 183 days in Ukraine in the tax year, counting the days you arrive and leave
if none of these settles it, you're resident if you're a Ukrainian citizen
Your family's permanent home in Ukraine, or registration as a sole trader, is enough to place your centre of interests there. Registering as self-employed, or declaring Ukraine as your main place of residence, is enough to make you resident.
Leaving takes planning. You need to give up your home and move your centre of interests abroad. If you're a resident leaving Ukraine for permanent residence abroad, you must file a tax return at least 60 days before you go. Where two countries both claim you, the treaty tie-breaker decides.
Income tax rates for 2026
Ukraine taxes most personal income at a flat 18%, with a separate military levy on top. There's no tax-free band.
Ukraine income tax and military levy rates for 2026
Income | Income tax | Military levy |
|---|---|---|
Salary, fees, foreign income, rent | 18% | 5% |
Dividends from Ukrainian companies paying corporate profit tax | 5% | 5% |
Dividends from foreign companies, funds and single-tax companies | 9% | 5% |
Interest and investment gains | 18% | 5% |
Diia City staff and gig specialists (up to €240,000 a year) | 5% | 5% |
Source: Tax Code of Ukraine, Article 167, and State Tax Service guidance for the 2026 declaration campaign. Military personnel pay the levy at 1.5%.
👉 State Tax Service: personal income tax and military levy rates (in Ukrainian)
👉 State Tax Service: the military levy rise to 5% under Law 4015-IX (in Ukrainian)
Worked example
You're single and employed by a Ukrainian company in 2026 on UAH 4,500,000 (about US$100k).
Your employer withholds income tax of UAH 810,000 (18%) and the military levy of UAH 225,000 (5%).
Your employer also pays the 22% social contribution on your pay up to UAH 172,940 a month, about UAH 456,562 a year. That's the employer's cost, not yours.
Your all-in bill is UAH 1,035,000, or 23% of your salary. Billed as a group 3 sole trader, it would be about UAH 292,828, or 6.5%.
Diia City for IT staff
Diia City is a special regime for IT companies. Their staff and gig specialists pay 5% income tax plus the 5% military levy, 10% in total, on pay up to the equivalent of €240,000 a year, with 18% above that. It applies from the month after the company joins, and only in months when it meets the conditions, including average pay of at least €1,200 and at least nine staff and gig specialists. It only helps if a Diia City company hires you, so our Employees rating doesn't count it.
👉 State Tax Service: taxing salaries and gig contracts at Diia City residents (in Ukrainian)
Crypto, investments and pensions
How is crypto taxed in Ukraine? There's no clear answer yet. The Law on Virtual Assets was passed in 2022, but the Tax Code still has no specific rules for crypto. A bill to regulate and tax virtual assets (No. 10225-d) passed its first reading on 3 September 2025 and is being prepared for its second reading. It is Proposed, not law. Until it passes, keep full records and take advice on your own position.
Investment income is taxed separately:
Dividends: 5% from Ukrainian companies that pay corporate profit tax, and 9% from foreign companies, funds and single-tax companies, plus the 5% levy.
Interest and gains on shares and funds: 18% plus 5%. Interest on Ukrainian government bonds is exempt.
Foreign income: declared in your annual return at the National Bank of Ukraine rate on the day received. Foreign tax can be credited, up to the Ukrainian tax, with a certificate from the foreign tax office.
On a US$1m portfolio earning US$40,000 of foreign dividends and US$40,000 of gains, the tax is about US$14,800, or 18.5%. Ukraine has no wealth tax.
Foreign pensions have no special relief in the Tax Code, so they're taxed as foreign income at 18% plus the 5% levy, unless a treaty gives the paying country the taxing right. On a US$40k pension and US$20k of foreign dividends, that's about 20%.
Inheritances and gifts from close family (first and second degree of kinship) are taxed at 0%. Others pay 5%, or 18% where one side is non-resident.
👉 Verkhovna Rada: bill No. 10225-d on virtual assets and its status (in Ukrainian)
👉 State Tax Service: how foreign income is declared and taxed (in Ukrainian)
Social security
Ukraine has one social contribution, the unified social contribution (ESV, or yedynyi vnesok), at 22%.
Employees don't pay it from their salary. The employer pays 22% on pay up to a cap of 20 times the minimum wage, UAH 172,940 a month in 2026. If pay is below the minimum wage, the contribution is still charged on the minimum wage.
Sole traders pay 22% for themselves on a base they choose, between the minimum wage and the cap, so at least UAH 1,902.34 a month.
Diia City companies pay the minimum contribution for each employee and gig specialist.
👉 Law on the unified social contribution, Article 8 on the 22% rate (in Ukrainian)
👉 State Budget Law for 2026, Article 32 on the contribution cap (in Ukrainian)
Double tax treaties
Does Ukraine have double tax treaties? Yes. The Ministry of Finance says Ukraine has 73 bilateral treaties in force. Partners include the UK, the United States, Germany, France, Poland, the Netherlands, Italy, Canada, Switzerland, Cyprus, Israel, Turkey and the UAE. Ukraine also continues to apply old USSR treaties with Japan, Spain and Malaysia.
👉 Ministry of Finance: Ukraine's double tax treaties (in Ukrainian)
👉 State Tax Service: list of countries with treaties in force (in Ukrainian)
Is there a digital nomad visa?
No. Ukraine has no digital nomad or remote work visa. Nationals of visa-free countries can stay for up to 90 days in any 180-day period. Check the Ministry of Foreign Affairs entry rules for your nationality before you travel.
A longer stay needs a temporary residence permit, and each one is tied to a reason in Ukraine. The main grounds include:
work for a Ukrainian employer under a work permit or a gig contract
founding or owning a stake worth at least €100,000 in a Ukrainian company (a two-year permit)
study, family reunification with a Ukrainian citizen, religious work, journalism and recognised volunteer programmes
during martial law, medical and rehabilitation volunteering and service with or assistance to Ukraine's defence forces
Remote work for a foreign employer isn't a ground on its own. Once you hold a permit and are resident, the normal tax rules apply.
👉 State Migration Service: temporary residence permits for foreigners (in Ukrainian)
👉 State Migration Service: the 90 in 180 days rule and extending your stay
Who is Ukraine good for?
How does Ukraine compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost.
☑️ Who is Ukraine good for? Tax ratings for expats in 2026
Expat profile | Ukraine rating | Why |
|---|---|---|
Employees | Moderate (Excellent with Diia City) | 23% on a US$100k salary: 18% income tax plus the 5% military levy. Your employer pays the 22% social contribution on top, so nothing else comes off your pay. Staff and gig specialists of Diia City IT companies pay 5% plus 5%, or 10%, but only that sector qualifies. |
Freelancers (self-employed) | Excellent | About 6.5% all-in on US$100k as a group 3 sole trader (FOP): 5% single tax and 1% military levy on turnover, plus the minimum social contribution of UAH 1,902.34 a month. You must be Ukrainian tax resident, and no costs are deducted. |
Retirees | Moderate | About 20% on a US$40k foreign pension plus US$20k of foreign dividends. Ukraine has no special relief for foreign pensions, so they're taxed as foreign income at 18% plus 5%. Inheritances within close family are taxed at 0%. |
Crypto gains | Moderate | There are no specific crypto rules in the Tax Code yet, so the treatment is unclear. A bill to tax virtual assets passed its first reading in September 2025 but is Proposed, not law. |
Investment income | Moderate | About 18.5% on our US$1m portfolio example: foreign dividends at 9% and gains at 18%, each plus the 5% military levy. Dividends from Ukrainian companies are 5% plus 5%. There's no wealth tax. |
Digital nomad visa | Poor | Ukraine has no digital nomad visa. Visa-free visitors can stay 90 days in any 180, and residence permits need a ground in Ukraine, such as a job, study, family or a company stake of at least €100,000. |
Filing and deadlines
If all your income came through Ukrainian employers or other tax agents, you don't usually need to file. If you had foreign income or other untaxed income, you file an annual return by 1 May 2027 for 2026 and pay by 1 August 2027.
Employees: income tax and the military levy are withheld monthly by the employer.
Group 3 sole traders: file a single tax return each quarter within 40 days of the quarter end, and pay the single tax, levy and social contribution quarterly.
Leaving permanently: file a return at least 60 days before you emigrate.
👉 Tax Code of Ukraine: Articles 49.18 and 179 on filing and payment dates (in Ukrainian)
Frequently asked questions
What is the income tax rate in Ukraine in 2026?
Most income is taxed at a flat 18%, plus a 5% military levy, so 23% in total. There's no tax-free allowance. Dividends from Ukrainian companies are taxed at 5% and foreign dividends at 9%, each plus the levy.
What is the military levy in Ukraine?
It's a separate tax on personal income. It rose from 1.5% to 5% for salaries from 1 December 2024. Group 3 sole traders pay 1% of turnover instead, until 31 December of the year martial law ends.
How much tax does a FOP group 3 sole trader pay?
5% of turnover, or 3% with VAT registration, plus a 1% military levy and a social contribution of at least UAH 1,902.34 a month in 2026. Turnover is capped at UAH 10,091,049 a year, and only Ukrainian tax residents can use it.
When do you become tax resident in Ukraine?
When you have a place of residence in Ukraine. If you also have one abroad, your permanent home decides, then your centre of vital interests, then 183 days, then citizenship. Registering as a sole trader is enough to make you resident.
How is crypto taxed in Ukraine?
There are no specific crypto rules in the Tax Code yet. Bill No. 10225-d on virtual assets passed its first reading in September 2025 and is waiting for its second reading. It is Proposed, not law.
How many double tax treaties does Ukraine have?
73 bilateral treaties are in force, according to the Ministry of Finance, including with the UK, the United States, Germany, France, Poland, the Netherlands, Canada and the UAE.
Where to go next
👉 Best countries for freelancers
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
