Money Transfers to Card: Who among Ukrainians Will Have to Pay 23% Tax.

Taxation of Bank Transfers in Ukraine

Practically every citizen of Ukraine regularly makes bank transfers - donating funds to support the Armed Forces, sending greetings on various holidays, helping relatives, or repaying loans. However, such transfers are considered taxable income and, in many cases, are subject to taxation.

According to Iryna Polyakova, every hryvnia that arrives in a bank account from another person can become a taxable object.

What is the Tax Rate on Card Transfers

Citizens of Ukraine must pay 18% personal income tax (PIT) and 5% military tax on the amounts received in bank transfers - totaling 23%.

'The tax code defines income as any cash inflow that improves a person’s financial situation, regardless of whether it is one-time or regular,' experts from the State Fiscal Service explain.

It is important to note that in 2024, the military tax was only 1.5% instead of the current 5%.

Which Card Transfers Are Not Taxed

Chairman of the Financial Committee of the Verkhovna Rada of Ukraine, Danilo Hetmantsev, emphasizes that not all types of transfers are subject to taxation:

'Money transfers to a card from relatives of the 1st and 2nd degree of kinship are not taxed if it is a gift or an inheritance,' Hetmantsev explains.

Such relatives include:

• Wife or husband
• Parents (own or partner’s)
• Children and grandchildren
• Relatives (brothers, sisters)
• Grandparents

When making a payment, it is recommended to specify that it is a gift and to have written confirmation, such as a gift agreement.

Analyzing the provided information, it should be noted that understanding the taxation of bank transfers is key to avoiding tax problems. Knowledge of the rules regarding non-taxable transfers will help manage finances properly and avoid unnecessary tax expenses.