Payment of dividends to a non-resident of Ukraine

In this article, we propose to consider the main issues related to the payment of dividends to non-residents of Ukraine, that is, individuals / legal entities, representatives of other states. First of all, it should be noted that the law of Ukraine ensures the rights of foreign investors, guaranteeing them the receipt of all profits that are obtained on the territory of our country legally. At the same time, we immediately indicate that a resident of Ukraine, which is a valid issuer of corporate rights, which pays dividends to a non-resident, is subject to general taxation legislation. That is, regardless of the fact to whom dividends are paid, the issuer is obliged to pay an advance fee of 25% without reducing the amount of dividends. This payment is not subject to the provisions of international agreements relating to the elimination or reduction of the amount of double taxation of income.

Now let's talk in more detail about how dividends are paid to founders who are not residents of Ukraine. First of all, we emphasize that the payment of dividends to the founder, who is not a resident of the country but is in fact a legal entity that does not have such status, the issuer of corporate rights is obliged to withhold 15% of the repatriation tax from this payment. The abolition of such taxation is possible only if there are any additional agreements between the states. Most often, these agreements relate to the exemption of non-residents from double taxation. In this case, the dividend recipient is required to present a special certificate of residence. Such a certificate, or a notarized copy thereof, is provided to an enterprise that pays dividends. It should be noted that the validity of such a certificate is limited to the reporting year in which it was issued. Further, the issuing enterprise submits this document to the tax authorities along with the completed tax report on payments made to non-residents.

In situations where dividends are accrued and paid, the issuing enterprise does not use the benefits of an international agreement, and 15% is withdrawn. In this case, the non-resident may submit an appropriate application to the tax authority at the location of the payer. Now a few words about the payment of dividends to individuals who are not residents of Ukraine.

Everything is much simpler here. Non-residents - individuals are subject to the same taxes as residents of Ukraine (at a rate of 15%). Control over the withholding of this amount is exercised by the enterprise that is the issuer of corporate rights. However, in cases where there is an agreement between states on exemption from double taxation, a non-resident individual has the right to submit a certificate similar to the one discussed above. Thus, there is also an opportunity to free yourself from unnecessary costs. True, when it comes to individuals, such actions will not always bring tangible benefits. In this situation, only a qualitative and professional accounting analysis can help determine the relevance of actions.