Foreign Income in 2026: How to Declare It and Pay Taxes in Ukraine

The author of the article: Denis Korablyov

Modified date: 24 July 2026

Have you received a salary, freelance payments, dividends or other income from abroad? If you remain a tax resident of Ukraine, this income must be declared and, as a rule, taxes must be paid in Ukraine – regardless of the country or account to which the funds were transferred. 

In this article, we will explain the tax rates for different types of income, declaration deadlines, required documents and the procedure for crediting taxes already paid abroad.

Who must declare foreign income

The obligation to declare worldwide income applies to tax residents of Ukraine. A resident is taxed in Ukraine on income received both within the country and abroad under the worldwide income principle set out in Clause 170.11.1 of the Tax Code of Ukraine.

Tax residency is determined under Clause 14.1.213 of the Tax Code of Ukraine according to the following sequence of criteria:

• place of residence in Ukraine;
• if a person also has a home in another country – their permanent place of residence;
• if this does not resolve the issue – the centre of vital interests, including family and main economic ties; registration as a sole proprietor may, in particular, be considered a sufficient indicator;
• if the centre of vital interests cannot be determined – presence in Ukraine for more than 183 days during the year;
• as the final criterion – Ukrainian citizenship.

Tax residency determines whether you are required to declare foreign income in Ukraine. Therefore, people who have lived abroad for a long time should review this issue separately.

If you have lived abroad for a long time, your residency status may change – in which case your worldwide income is not declared in Ukraine. This issue should be assessed separately: we provide a service for determining and changing tax residency and obtaining a tax residency certificate.

Which income is considered foreign income

Foreign income is income derived from sources outside Ukraine (Clause 14.1.55 of the Tax Code of Ukraine). The most common examples include:

• salary from a foreign employer, including payment for remote work;
• dividends from foreign companies;
• payments for freelance work and services provided to foreign clients that are received on a personal bank card rather than through a sole proprietorship;
• income from renting out property abroad;
• interest on foreign deposits and royalties;
• income from the sale of foreign assets.

It does not matter which account received the funds or in which currency they were paid. What matters is the source of the income and your status as a tax resident of Ukraine.

Important: if you receive payments as a sole proprietor into a business account, different rules apply – specifically, the rules of the simplified taxation system. This article focuses on income received by an individual, not by a sole proprietor.

Tax rates by type of income

The applicable rate depends on the type of income. Most foreign income is taxed at the standard rate, while a lower rate applies to dividends:

Therefore, most foreign income is taxed at a combined standard rate of 23% – 18% personal income tax + 5% military levy. Certain types of income are exceptions, including foreign dividends, which are taxed at a combined rate of 14% – 9% personal income tax + 5% military levy under Clause 167.5.4 of the Tax Code of Ukraine.

Important note regarding dividends: the 9% rate applies specifically to standard dividends paid on shares and corporate rights. Payments from foreign structures that do not have legal entity status or pass-through payments may be taxed at 18% – such cases should be reviewed separately.

How to declare foreign income

Foreign income must be reported in the annual tax return on property and income. The procedure is as follows:

• submit the tax return by 1 May of the year following the reporting year (Clause 49.18.4 of the Tax Code of Ukraine);
• pay personal income tax and the military levy by 1 August of the same year (Article 179.7 of the Tax Code of Ukraine).

Income received in a foreign currency must be converted into hryvnias at the NBU exchange rate applicable on the date the income was received (Clause 164.4 of the Tax Code of Ukraine). Therefore, it is important to record the date and amount of each payment using a statement from the bank or payment system.

It is also worth noting that the tax authorities are increasingly receiving information about foreign accounts and income through the automatic exchange of financial account information under the Common Reporting Standard (CRS). Therefore, it is becoming increasingly difficult to assume that foreign income will remain unnoticed. Read more in our article about the CRS agreement.

Avoiding double taxation

If you have already paid tax abroad on foreign income, it may be credited against Ukrainian personal income tax (Article 13 and Clause 170.11.2 of the Tax Code of Ukraine). However, both of the following conditions must be met:

• Ukraine has an effective double taxation treaty with the country in which the income was received;
• you have a certificate from the foreign tax authority confirming the amount of tax paid, which has been legalised by apostille or consular legalisation and translated.

There are two important limitations. First, the amount credited cannot exceed the Ukrainian personal income tax due on that income: if the foreign tax was higher, Ukraine will not refund the difference. Second, the 5% military levy cannot be reduced by foreign tax – it must be paid in Ukraine in any event, even if the Ukrainian personal income tax is fully offset by the tax paid abroad.

Calculation example

Suppose a Ukrainian resident received UAH 100,000 in salary from a foreign company during the year and paid UAH 15,000 in tax in that country. A double taxation treaty is in force, and the resident has a legalised certificate.

Therefore, the foreign tax credit mechanism prevents personal income tax from being charged again on the full amount. However, the military levy must still be paid regardless of the amount of tax paid abroad.

If the income consisted of foreign dividends of UAH 100,000, personal income tax would be 9% – UAH 9,000 – plus a 5% military levy of UAH 5,000, for a total of UAH 14,000.

Common mistakes when declaring foreign income

• Failing to declare the income at all. Many people believe that the tax authorities will not detect payments received from abroad. However, through the automatic exchange of information under CRS, account and income data are exchanged between countries, and undeclared income may result in additional tax assessments, penalties and late-payment interest.
• Forgetting about the military levy. Even if the foreign tax fully offsets the Ukrainian personal income tax, the 5% military levy must still be paid because it cannot be reduced by tax paid abroad.
• Failing to retain a legalised certificate. Without a certificate from the foreign tax authority bearing an apostille and accompanied by a translation, the tax paid abroad cannot be credited, and Ukrainian personal income tax will have to be paid in full.
• Confusing personal income with income earned as a sole proprietor. Payments received into a business account and income received by an individual are taxed differently and must not be mixed.
• Using the wrong exchange rate. Income must be converted using the NBU exchange rate on the date it was received, not the filing date or the average annual rate.