Taxation of interest income on deposits with the Bank

Interest income of non-residents on deposits with the Bank is subject to non-resident income tax at the rate of 15%, unless otherwise provided by the Treaties for the avoidance of double taxation between Ukraine and investor’s country of residence (hereinafter - Treaties).

The Bank, as a tax agent, has the right to apply tax exemption or reduced tax rate provided by the Treaties if a non-resident is (1) the beneficial owner of income and (2) the resident of a country which a Treaty is concluded with.

To benefit from an income tax exemption or tax reduction a non-resident shall submit to the Bank:

• application representing that non-resident is a beneficial owner of such income together with documents confirming the status of beneficial owner of such income;
• certificate of residence (or a notarized copy thereof) confirming that the non-resident is a resident of the country with which a Treaty is concluded. The certificate is issued by the authorised body of respective country and must be properly legalised (apostilled) with notarised Ukrainian translation.

If the above documents are not provided, a non-resident income tax at the rate of 15% will be withheld at the time of effecting interest payment.

Taxation of income from transactions with Ukrainian Government Bonds, Municipal Bonds and other bonds under the state or municipal guarantee

Income of non-residents under transactions with Ukrainian Government Bonds, Municipal Bonds and other bonds under the state or municipal guarantee are not subject to non-resident income tax except for income of residents of countries from the list approved by the Cabinet of Ministers of Ukraine from sale or other disposal of such bonds.

If a non-resident is registered in a country included in the list approved by the Cabinet of Ministers of Ukraine, non-resident income tax on profit from sale or other disposal of Ukrainian Government Bonds, Municipal Bonds or other bonds under the state or municipal guarantee will be withheld in the amount of 15% at the time of effecting such payment. Such profit is defined as positive difference between the proceeds from the sale and the documented costs of purchase. If a non-resident does not provide to the Bank documents confirming the costs of purchase, the whole amount payable to a non-resident from the sale or other disposal will be the base for calculation of non-resident income tax.