Accountancy in Ukraine involves an accountancy company or a full-time accountant managing the cash budget, preparing accounts and reporting to the state authorities, handling the workflow with lawyers, and assessing taxes against budgets. The accountant always knows when, to whom, and how much tax one has to pay.

You can contact Golden Shape, Leinonen, or Edge For for bookkeeping.

Businesses in Ukraine pay income tax annually. The base for the assessment of taxes is the accrued net earnings for the past calendar year.

The tax on profit for LLCs is 18%.

The proviso is that you must document every expense transaction.

In Ukraine, the taxation system for different forms of staff employment (an employee and a contractor or SP) is different. You can learn more about working with Ukrainian employees in the article Standard Terms of Cooperation with Employees in Ukraine.

Each month, an employee receives a salary from the employer, which is an expense for the employer and income for the employee.

In Ukraine, the employer deducts and pays over the taxes on the income of the employee. Before you pay the salary to your employee, you deduct:

• Income tax—18%
• Military fee—1.5%

After the salary is paid, you must pay an additional employer tax, which is a unified social tax, in the amount of $35.

When dealing with hired staff in the Ukrainian IT industry, the net amount of salary is negotiated, which already includes the tax deduction.

The contractor’s (SP’s) salary is his/her income. The tax rate in this case is 5% of income. In addition, the contractor (SP) pays the UST in the amount of about $35.

In the Ukrainian IT industry, the company often assumes the payment of taxes for the employee, so it pays a higher salary than agreed, taking into account the 5% tax.

Such workflow is common in Ukraine among IT companies.