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23 Jul. 2022


Double taxation for Ukrainian refugees: will Ukrainians pay taxes abroad

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Double taxation for Ukrainian refugees: will Ukrainians pay taxes abroad

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In September, refugees from Ukraine will face the problem of double taxation. This is reported by the European Business Association.

Many Ukrainians continue to work remotely for Ukrainian companies and receive wages, paying all taxes. However, there is a rule that after 183 days of stay abroad, foreigners can be recognized as tax residents and taxed. In fact, a person officially employed in Ukraine will pay taxes in the country of temporary residence.

Ukrainians registered as individual entrepreneurs will also pay taxes twice. For such workers, the issue of double taxation will arise at the end of August.

The only country where the issue of double taxation of Ukrainians has already been resolved is Poland. As for other European countries, there are general rules.

At the same time, along with the problem of double taxation of labor income received from Ukrainian employers, there is a risk of double payment of social contributions from the wages of employees who continue to work under labor contracts with Ukrainian employers, but are physically located outside of Ukraine, the EBA says.

The head of the parliamentary committee on finance, tax and customs policy, Danylo Hetmantsev, told Forbes that from 2023 refugees will be able to avoid double taxation.

To circumvent double taxation, the government expects to receive relevant proposals from the Organization for Economic Cooperation and Development. The option of joining tax non-residents to one agreement is being discussed.

The authorities expect to resolve this problem by the end of 2022. Thus, refugees who receive income in Ukraine will pay taxes only to the Ukrainian budget.