Income Tax
According to sub-ss 167.5.1, 167.5.3 of the tax Code of Ukraine dated 02.12.2010, № 2755-VІ (hereinafter - TCU), income tax at 20% rate should be withheld from all the passive incomes and also from dividends.
However, based on the norms of sub-s 167.5.2 of the TCU, 5% of the income tax is withheld from the stock dividends and corporate rights, accrued and paid by the residents – income tax payers (excluding the stock dividends, investment certificates paid by the collective investment schemes, which withhold from the dividends 20% of income tax).
Thus, if, for example, the legal entity - single tax payer pays the dividends to the individual, then the income tax at 20% rate should be withheld from such income. But if the legal entity - income tax payer pays the dividends to the individual, then the income tax at the 5% rate should be withheld from them.
Taxable dividends should be reflected by the tax agents in Section I of the Tax calculation of income amounts accrued (paid) in favor of individuals, and the amounts of tax withheld from them (form № 1ДФ), which form is approved by the Order of the Ministry of Finance of Ukraine of 13.01.2015, № 4, with the income identification “109”.
NB! The stock dividends accrued to the individuals, or other corporate rights with the status of preferential or any other status, which provides for the payment of dividends fixed amount or amount that exceeds the payout amount rated at any other share (corporate right), emitted by such payer, for taxation purposes, is equated with the payment of wages with the appropriate taxation (sud-s 170.5.3 of the TCU). That is such dividends on preferential shares (corporate rights) as well as wages are to be taxed by the income tax - at 15% (20%) rates.
The income tax withheld from the dividends should be transferred to the budget as a general rule when their payment. In situation, when the dividends accrued but not paid, the income tax is to be paid within 30 days following the close of that month, when the dividends have been accrued (sub-s 168.1.5 of the TCU).
According to the sub-s 165.1.18 of the TCU, the dividends accrued in the form of shares (tranche, stocks), issued by the legal entity – resident are not to be included in the income tax by the individuals. Besides, the accrual of dividends by no means changes the ratios (shares) of participation of shareholders (owners) in the authorized capital stock of emitter and a result of this the authorized capital stock of emitter is increased on the aggregate principal amount of the accrued dividends.
War tax
From 1 January 2015, all the incomes of the individuals, from which the income tax is paid (para 161, sub-s 10, sec XX of the TCU), are the withholding base of 1,5% war tax. So, the war tax should be paid also from the dividends.
Therefore, 1,5% war tax should be withheld in 2015 when the accrual dividends to individuals, from which the income tax is withheld.
The war tax is to be paid at the same rules as the income tax. The income amount, from which the war tax is withheld, is sure to be included in the appropriate line of Section II, f. № 1ДФ.
