Ukraine

Domestic branches or other separate units are not treated as separate taxpayers for CIT purposes.

In Ukraine, it is not currently possible to register a branch of a foreign legal entity. A foreign company may set up a representative office in Ukraine, which is similar to an unincorporated branch. A non-resident company conducting business activities via a representative office is deemed to carry out business in Ukraine through a PE and may be subject to CIT at the standard rate.

When a foreign company conducts business in Ukraine through a PE, the taxable income should be determined on the same basis as for domestic entities. The non-residents having a PE in Ukraine must register with the Ukrainian tax authorities and pay CIT to the budget.

The non-residents having a PE in Ukraine should calculate their taxable profits in the ordinary way as net profits before tax (NPBT) as per accounting records and adjusted for 'tax differences' (see the Income determination section). Taxable income of the PE should be determined based on the arm’s-length principle.

Distributions made by a PE (from after-tax income) to its head office should not trigger any further taxation in Ukraine, provided that the head office is in a jurisdiction that has an effective DTT with Ukraine. However, certain DTTs with Ukraine provide for the so-called ‘branch tax’ on such distributions, similar to WHT on dividend income.

PEs of non-residents are subject to transfer pricing rules.