Taxation is one of the key factors that affects the choice of a country for doing business, launching an IT project, or relocating a team. For companies and entrepreneurs who work with international markets, it is important to understand not only the tax burden. It is also important to understand the general logic of the system. This includes which taxes apply, how predictable the system is, and what special rules exist for businesses and specialists.

Ukraine is traditionally seen as a country with a strong IT sector and a large number of qualified specialists. At the same time, taxation in Ukraine raises many practical questions. This applies both to local entrepreneurs and to foreign companies. Such companies often plan to work with Ukrainian developers or open a business in Ukraine. Understanding the tax model becomes especially important when comparing Ukraine with alternative jurisdictions.

One of the common reference points for comparison is the HTP (Hi-Tech Park) in Belarus. It is a special legal regime. For many years, it attracted IT companies and startups. The reasons are clear rules and a specific approach to taxation. Despite differences in economic models and business environments, a comparison of Ukraine and the Hi-Tech Park helps to assess the advantages and disadvantages of each option. This is important in terms of tax burden, administration, and business convenience.

In this article, we review the taxes that apply in Ukraine. We explain how they apply to businesses and specialists. We also compare the general approach with the conditions offered by the Hi-Tech Park. This overview is useful for companies choosing a jurisdiction. It is also useful for entrepreneurs who evaluate growth and scaling options.

General Approach to Taxation in Ukraine

The tax system of Ukraine follows a classical model. It covers both businesses and individuals who earn income in the country. For companies and specialists working with international markets, it is important to understand not only the list of taxes. It is also important to understand how they are applied in practice.

Structure of the Tax System and Key Principles

The Ukrainian tax system divides taxes into business taxes and personal income taxes. Companies pay taxes related to business results. They also pay other fees. They depend on the type of operations and the organizational and legal form of the business. Individuals pay taxes depending on income. This is applicable regardless of whether income comes from work or from business activities.

The system focuses on formal accounting. This requires regular reporting. All transactions must be confirmed by documents. At the same time, there are simplified regimes for small businesses and some entrepreneurs. These regimes reduce administrative pressure and simplify calculations.

Tax Burden for Businesses and Specialists

The tax burden in Ukraine depends on the chosen business structure. For companies, it includes profit taxes and mandatory payments related to employee salaries. It also includes other charges that arise during operations. For specialists and individual entrepreneurs, the key factors are income structure and the chosen tax regime.

In practice, Ukraine is often seen as a country with a moderate tax burden for specialists. This is especially true in the IT sector. This is due to the general use of individual entrepreneurs. At the same time, companies with employees and a classic structure may face a higher overall burden. This requires careful financial planning.

Administration and Practical Features

One key feature of taxation in Ukraine is strong attention to formal compliance. Companies and entrepreneurs must keep records. They must submit reports on time. They must confirm transactions with primary documents. Errors or missed deadlines can lead to questions from tax authorities.

At the same time, electronic services have developed in recent years. They simplify reporting and communication with authorities. For businesses working remotely or with foreign clients, proper accounting setup is very important. Professional local support is often required.

Taxes for Businesses in Ukraine

When doing business in Ukraine, the tax burden depends on the organizational and legal form, type of activity and income structure. For companies working with international markets, it is important to understand which taxes are the main ones, and which ones depend on the specifics of the business.

Main Taxes for Companies

For most companies, the key tax is the financial results tax. It is calculated based on profit. Proper accounting of income and expenses is required. Enterprises may also face turnover-related taxes. This is applicable if certain criteria are met.

A separate part of the tax burden is the cost of employee payments. This includes taxes and payroll contributions. These payments often account for a large share of the total costs for companies with employees and a traditional employment model.

Features for IT Companies and Service Businesses

IT companies and service projects in Ukraine often use flexible work models. Cooperation with individual entrepreneurs is also widely used. This helps to reduce tax costs and simplify administration compared to retaining a large staff.

For export-oriented enterprises, the structure of contracts and accounting for foreign exchange earnings are important. With proper structuring, tax costs can be optimized. However, this requires thorough documentation and financial control.

Additional Mandatory Payments

In addition to basic taxes, companies in Ukraine may face additional mandatory payments. They depend on the type of activity and resources used. They may include local fees, property or land payments, as well as infrastructure-related fees. Import and export operations can also create additional obligations.

In general, the tax burden in Ukraine is complex. This requires a structured approach to planning. Understanding the tax structure helps companies assess costs and choose the right business model.

Examples of Tax Rates in Ukraine for the IT Sector

In the IT sector, specific tax examples help show the real tax burden:

• Corporate Income Tax (CIT): The standard rate is 18% of taxable profit. This is a core business tax.
• Value Added Tax (VAT): The standard rate is 20% for most goods and services. Some operations, such as export of services, may be taxed at 0%. Reduced rates may apply to certain goods, such as 7% or 14%.
• Unified Social Contribution (USC) paid by the employer: The rate is about 22% of gross salary, with a capped base. This strongly affects total employment costs.
• Taxes on employee income: Employers withhold about 18% personal income tax and an additional military levy of about 1.5%.
• Simplified system for small businesses: Many IT contractors work as individual entrepreneurs. They may pay 3% of income plus social contributions, or 5% without VAT. This often results in a lower burden than standard corporate taxation.

These examples help estimate tax obligations for IT companies and specialists in Ukraine. Actual amounts depend on structure, turnover, and chosen regimes.

Brief Overview of the Hi-Tech Park as a Comparison Point

When comparing Ukraine with alternatives, Hi-Tech Park in Belarus is often mentioned. This is a special legal regime created for the IT sector and technological projects.

General Logic and Goals of the Special Regime

The Hi-Tech Park aims to attract and retain IT companies and startups. Its main idea is to provide stable and predictable conditions. Residents benefit from a special tax and corporate framework. These rules differ from standard business conditions.

The regime focuses on export of services, high-value products, and business scaling. This makes the Hi-Tech Park a useful benchmark for comparison with Ukraine, especially for international IT work.

Applicable Companies and Specialists

The regime targets companies in software development, IT services, and digital products. Both product and service companies can become residents. This includes outsourcing and outstaffing projects.

For specialists, the regime is also attractive. It offers a specific approach to contracts and income taxation. This is why the Hi-Tech Park is often seen as an alternative jurisdiction for IT teams and entrepreneurs.

Comparison of Tax Burden: Ukraine and the Hi-Tech Park

When comparing Ukraine and the Hi-Tech Park, it is important to look at the overall model. This applies to both companies and specialists.

Taxes for Companies

In Ukraine, IT companies usually pay a profit tax of 18%. VAT of 20% is applied after reaching the thresholds. Employment-related payments make up most of the costs.

In a high-tech park, residents benefit from a different approach. Income tax and VAT are set at 0%. This significantly reduces tax costs at the company level. This is especially important for products and export-oriented enterprises.

Taxes for Specialists

In Ukraine, the employee’s income is taxed in the amount of 18% plus a fee of 1.5%. The employer also pays 22% of social contributions. This increases the total cost of employment.

A common alternative in Ukraine is cooperation with individual entrepreneurs.

In the high-tech park, the income of specialists is taxed at 13%. Social contributions are calculated on a limited basis. As a result, the overall burden is lower than with standard employment in Ukraine.

Total Tax Burden

Ukraine offers flexibility thanks to different models of work. This is attractive for outsourcing and service companies. However, with a classic employment structure, the total burden can be high.

Hi-Tech Park offers a more concentrated and predictable model. Taxes at the company level are minimal. Specialists’ taxes are lower. Payments are easier. This makes the regime attractive for food companies and startups focused on long-term growth.

The final choice depends on the business model, team structure and strategic goals.

Administration and Ease of Doing Business

Tax rates are not the only factor. Practical aspects also matter.

Complexity of Accounting and Reporting

In Ukraine, companies must keep detailed records. They must submit regular reports. Legal entities submit quarterly VAT reports, annual income tax reports and monthly social contribution reports. Penalties for errors or delays can range from 10% to 50% of the tax amount. Individual entrepreneurs under the simplified system have easier reporting. They submit annual declarations and pay fixed social contributions quarterly.

In a high-tech park, reporting is centralized and standardized. Residents submit simplified reports every quarter. No income tax is charged. This reduces accounting costs and the risks of errors.

Flexibility in Working with Staff and Contractors

In Ukraine, the maintenance of full-time employees is associated with high costs due to income tax, military duty and social contributions. Therefore, many IT companies prefer to work with individual entrepreneurs. In this case, a rate of 5% of income and fixed social contributions are applied, which gives more flexibility and is convenient for working with remote teams.

In Hi-Tech Park, the approach to staff is simpler. The income of specialists is taxed at a rate of 9%, and social contributions are calculated at a limited basis. This mode facilitates the scaling of teams and helps companies effectively control costs.

Predictability of Conditions

Stability is important for business. In Ukraine, tax rates are fixed. Nevertheless, law enforcement practices may change. This may require additional consultations.

HTP offers greater predictability. The rates are fixed. The rules are unified. The procedures are simplified. It helps with budgeting and long-term planning.

What to Choose: Ukraine or the HTP

The choice depends on strategy, work model, team structure, and goals.

When Ukraine Is the Better Option

Ukraine is suitable for outsourcing and cooperation with individual entrepreneurs. The tax burden can be as low as 5% plus fixed contributions. Hiring is flexible. The market offers many skilled specialists. This is also suitable for startups and service companies.

When the Hi-Tech Park Is More Suitable

The Hi-Tech Park is attractive for product companies and export-focused startups. Profit tax is 0%. Specialist tax is 9%. Reporting is simple. This is convenient for scaling and long-term planning.

Key Factors to Consider

Key aspects include:

• Business model
• Team structure
• Total tax burden
• Accounting and reporting complexity
• Long-term goals

Based on these factors, companies can choose the most effective jurisdiction.

Conclusion

Choosing a jurisdiction for an IT business or professionals is not only about tax rates. This also includes administration, predictability and strategy. Ukraine is suitable for outsourcing and work through individual entrepreneurs. Hi-Tech Park is suitable for food companies and export-oriented teams.

Our team supports companies and specialists at all stages. This includes moving, choosing a jurisdiction, creating a team, as well as legal and tax support. We help reduce risks, optimize taxes and ensure effective business operations both in Ukraine and in HTP.

How to contact us 

For more information or consultations on organizing an assignment to joining HTP in Belarus, do not hesitate to contact us. We are here to help and support you.

Phone and email communication options are available for your convenience:

• +375293664477 (WhatsApp/Telegram/Viber);
• info@spex.by.