If you give UAH 3000 for your birthday, you have to pay tax
14 April 16:25
The latest news from the tax authorities has made Ukrainians seriously concerned. First, they said that every sale and purchase transaction, even of second-hand items, would be subject to taxation, and now there is talk that taxes will have to be paid on any amount transferred to a card.
People are shocked by this fiscal pressure. What to expect next, I found out
It all started with the fact that on March 1, the tax authorities were able to track all sales transactions and, accordingly, money transfers. According to journalists of the Telegraph online edition, Ukrainians have to pay tax on any bank transfer, even if it is 1 UAH, citing a response from the tax office. They also cited the Tax Code, which states that all individuals who received money transfers (except for salaries, scholarships, and benefits) are required to declare such income and pay taxes.
Thehead of theVerkhovna Rada ‘s tax committee, Danylo Hetmantsev, was quick to reassure that the tax does not apply to everyone. For example, transfers from relatives are not taxed, have not been taxed and will not be taxed. According to Art. 174 of the TCU, inheritance and gift objects inherited by family members of an individual of the first and second degree of kinship are taxed at a zero rate (subpara. 14.1.263, subpara. 14.1 of Article 14 of the TCU: husband, wife, children of the spouses, parents of the spouses, grandparents, brothers, sisters, grandchildren).
“That is, receiving a gift from the above relatives, in particular in the form of funds received on the account, is neither subject to declaration nor taxation,” Hetmantsev said.
Also, according to subpara. 165.1.31, income in the form of reimbursable financial assistance is not taxable, meaning that if someone lent you money and you returned it, it is also not subject to personal income tax and military duty.
“In other words, the payment itself is not a basis for declaration and taxation, unless it is income of a person not from a tax agent (entrepreneur). And if it is income, then yes, it is subject to taxation, and has been for 25 years,” explained Hetmantsev, emphasizing that there is no reason to worry at all, as the State Tax Service does not have access to accounts and bank secrecy.
Remittances from abroad and debts are under attack
But things are not that simple. The fact is that Hetmantsev is not telling the truth. There are a lot of nuances that
For example, if a citizen receives income on a card from another citizen (not a tax agent, not an individual entrepreneur, not a legal entity, etc.), such income is subject to taxation: Personal income tax – 18%, military duty – 5%. And there are also remittances from abroad, which are also considered income for Ukrainian citizens and are subject to taxation.
“The amounts of remittances from abroad are subject to personal income tax and military duty. This applies to transfers received in any way: crediting to a current or card account or receiving cash,” Valeria Stadnychuk notes.
Everyone must independently include the amount of international transfers received in their annual taxable income and pay the tax. The amount of the transfer in foreign currency is converted into hryvnia at the NBU exchange rate on the date of receipt of the transfer.
“Not all international transfers are automatically considered taxable income. There are exceptions, such as certain types of social benefits or gifts from close relatives. But for the tax authorities, the purpose of payment in card transfers is not legally binding. They consider such receipts as potential income, regardless of the specified purpose. And since the transfer does not indicate that the money came from a relative, you still have to prove your relationship. If the transfers are regular, the tax authorities may have questions,” the economist believes.
To convince the tax authorities that it is your relatives who are constantly sending you money, you will have to confirm the relationship and provide birth, marriage, or other documents. However, if a distant relative or just an acquaintance made the transfer on behalf of a relative, the tax authorities will not let you off the hook.
“Difficulties may arise for a citizen who is being repaid a debt. Despite the fact that Hetmantsev assured: “income in the form of reimbursable financial assistance is not taxed,” if the amount is more than UAH 2000, you will need to prove that it was a debt. That is, you need to provide: a loan agreement; a receipt for the funds; bank statements confirming the movement of funds,” says Valeria Stadnychuk.
Another nuance is that if friends, relatives (close or distant), acquaintances transferred money for a birthday or other personal event, it can be considered income if the amount exceeds 25% of the minimum wage – that is, more than UAH 2000 with a minimum of UAH 8000,” says Stadnychuk.
Important to know:
Regular receipts of funds to a bank card can, of course, be regarded by the tax authorities as conducting business without registration and a fine of UAH 17 thousand.
The tax return on property and income for 2024 should be submitted no later than April 30, 2025. The amount of the declared tax liability must be paid by August 1, 2025.
Civil servants and officials of local governments, individual entrepreneurs on the general taxation system, and persons who lease property or receive other specific income are required to file a declaration. Other citizens may file a declaration voluntarily if they consider it necessary.
Failure to submit or late submission of a tax return is subject to a fine of UAH 340. Administrative liability is possible – up to UAH 136.
Author: Alla Dunina
