TAX RESIDENCY: WHERE TO PAY TAXES FOR UKRAINIANS ABROAD?

Migration to other countries used to be normal for our realities, but now, after the start of a full-scale invasion of the Russian Federation on the territory of Ukraine, Ukrainians have begun to move en masse. In addition, Ukrainians who remained on the territory of Ukraine began to consider options for doing business abroad, including remotely. The issue of paying taxes is important in this aspect. After all, if a person lives and works in Ukraine and accordingly pays taxes on the territory of Ukraine, the question arises: what to do with taxes outside of Ukraine? So, to solve this issue, we need to refer to the concept of "tax residency".

The legislative definition of this concept is in the Tax Code. In accordance with 14.1.213. a resident is a natural person who, of course, lives on the territory of Ukraine, or a person who has a place of residence in another state, has closer personal or economic ties (center of vital interests) in Ukraine. If the state in which an individual has a center of vital interests cannot be determined, or if an individual does not have a place of permanent residence in any of the states, he is considered a resident if he stays in Ukraine for at least 183 days (including the day of arrival and from 'ride) during the period or periods of the tax year.

To determine the country in which you will be a tax resident, the following must be taken into account - this is a stay on the territory of the state for more than 183 days and the presence of a center of vital interests - this concept is discretionary and there is no clear legal definition, you must have social, economic, family ties in the country of residence, it can be the presence of purchased or rented real estate, the presence of a husband or wife, a family in the territory of one or another state, as well as being engaged in entrepreneurial activities.

However, there may be reasons for which both countries may recognize you as a tax resident. In this case, an individual is considered a resident of Ukraine if he is a citizen of Ukraine.

But other conditions should also be taken into account, conducting business activities on the territory of one or another state, the format of its implementation, work under an employment contract, plans for the future.

But every situation is different, in every case it is necessary to investigate the circumstances of the move and the plans for the future of each person. Perhaps it will be better for a person to remain a tax resident of Ukraine, or to pay taxes according to the laws of other countries, at the same time, it is necessary to remember the double taxation avoidance agreements concluded between Ukraine and various countries of the world.

Therefore, each situation should be considered separately, but in any case we will be able to find a better solution to the situation for you.