Tax discount for individuals

Press service of the State Tax Service of Ukraine, published 11 December 2023 at 11:42 Chapter: News

Reminder! Individuals have a right for tax discount on expenses incurred in 2022.

For this, it is necessary to submit annual property and income tax declaration by December 31, 2023 inclusive (hereinafter – declaration).

Please note that right to receive tax discount is not carried over to the next year. That is, you can certify your expenses in order to return part of funds for 2022 only until the end of current year.

Individuals will be able to receive tax discount for expenses 2023 in 2024.

Right to tax discount is defined by Article 166 of the Tax Code of Ukraine (hereinafter – Code).

Tax discount for individuals, who are not business entities, is a documented amount (cost) of expenses incurred by a resident taxpayer in connection with the purchase of products (works, services) from resident individuals or legal entities during the reporting year, which is allowed to reduce the taxpayer’s total annual taxable income received as a result of such accounting year in the form of salaries and/or in the form of dividends, in cases specified by the Code (Sub-paragraph 14.1.170 Paragraph 14.1 Article 14 of the Code).

Total amount of tax discount accrued to the taxpayer in the reporting tax year cannot exceed amount of annual total taxable income, accrued as salaries, reduced taking into account provisions of Paragraph 164.6 Article 164 of the Code, except for cases specified in Sub-paragraph 166.4.4 Paragraph 166.4 Article 166 of the Code.

Tax discount includes expenses actually incurred by the taxpayer during the reporting tax year, confirmed by relevant payment and settlement documents, in particular, receipts, fiscal or commodity checks, profitable cash orders identifying the seller of products (works, services) and person applying for tax discount (of their buyer (recipient)), as well as copies of contracts, if available, in which cost of such products (works, services) and payment term for such products (works, services) must be reflected (Sub-paragraph 166.2.1 Paragraph 166.2 Article 166 of the Code).

Copies, specified in Sub-paragraph 166.2.1 Paragraph 166.2 Article 166 of the Code, of documents (except for electronic settlement documents) are provided together with tax declaration and originals of these documents are not sent to the controlling body, but are subject to storage by the taxpayer during the statute of limitations established by the Code (Clause 1 of Sub-paragraph 166.2.2 Paragraph 166.2 Article 166 of the Code).

Expenses that can be included in tax discount are:

part of the interest amount paid for using mortgage housing loan;

donations or charitable contributions to the non-profit organizations;

amount of funds paid to domestic educational institutions to compensate for the cost of education;

insurance payments under a long-term studying contract;

amount of costs for payment of auxiliary reproductive technologies;

amount of expenses for payment of the cost of state services related to adoption of a child;

amount of funds paid in connection with conversion of vehicle;

amount of expenses in the form of rent (for internally displaced individuals);

amount of costs for treatment of acute respiratory disease COVID-19;

amount of expenses for the purchase of shares, issuer of which is a legal entity that has acquired status of the Diia City resident.

In order to receive right to tax discount, the taxpayer submits tax declaration to the controlling body in which is registered.

Tax declaration is submitted at the taxpayer’s choice, unless otherwise provided by the Code, in one of the following ways:

a) personally by the taxpayer or individual authorized to do so;

b) sent by mail with a delivery notification and attachment description;

c) by the electronic communication means in the electronic form in compliance with requirements of the Laws of Ukraine № 851-IV as of 22.05.2003 "On electronic documents and electronic document circulation" and № 2155-VIII as of 05.10.2017 "On electronic trust services".