A foreign investor may purchase Ukrainian property either directly or through a local company. However, there is a requirement for foreign individuals to rent out premises in Ukraine via a Ukrainian legal entity or a private entrepreneur acting as their agents.
Foreign individuals and legal entities may acquire only a non-agricultural land plot, which is attached to the real estate object. Non-residents may lease land for up to 50 years. Ukrainian company or individual may only purchase up to 100 ha of agricultural land.
Profits earned from renting out real estate by a resident company or via a non-resident’s permanent establishment are taxable in Ukraine at the standard corporate tax rate, which is set at the level of 21% for 2012, 19% for 2013 and 16% for 2014 and onwards.
Rental income received by a non-resident from Ukraine is subject to 15% Ukrainian withholding tax.
Individuals’ income from renting out property is taxed at the standard 15%/17% rate.
Lease of a building, premises and privately owned land is subject to 20% VAT (17% from 2014). Lease of state-owned land is exempt from VAT, if the lease payments are due to the state or local authorities.
Source : PWC