Ukraine

Corporate - Branch income

Last reviewed - 30 June 2020

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.

PEs 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 an “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.

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