The State Tax Service issued a letter on 21 January 2015 clarifying the latest amendments to the Tax Code in relation to taxation of pensions, interest on bank accounts, dividends, prizes and winnings.
Details of the clarification;
- From 1 January 2015 pension income over UAH3,654 (i.e., three minimum salaries) is subject to withholding tax at a rate of 15%. In the case of pension income over UAH12,180 (i.e., ten minimum salaries), the tax agents should withhold individual income tax at a rate of 20%.
- For interest paid on current and deposit bank accounts, the tax agents are liable to withhold personal income tax at a rate of 20%.
- Dividends paid to an individual generally qualify as passive income subject to individual income tax at the rates of 5% for dividend income on shares and corporate rights paid by resident payers of the corporate income tax (except for dividends on shares, investment certificates paid by the mutual investment funds). The rate is 20% in all other cases.
- Tax agents paying prizes and cash winnings (except for lottery winnings, which are subject to individual income tax at the rate of 15%) are liable to withhold individual income tax at the rate of 30%. Cash prizes in sport competitions are subject to taxation at the rate of 15%.The operators of lotteries and other entities making these payments should act as tax agents and report the income paid.
