Declaration‑2026 as a tool for tax planning

As of 1 January 2026, Ukraine has launched the personal income declaration campaign for 2025, which is becoming increasingly important due to legislative changes, the expansion of the list of taxable transactions, and active clarifications by the tax authorities. The key question is who is obliged to file a property and income tax return, and who may do so voluntarily in order to benefit from a tax rebate, since errors in assessing the obligation to declare are fraught with additional accruals of personal income tax, military levy, fines, and tax disputes.

1. Basic rules of Declaration‑2026
The Declaration‑2026 campaign covers income for 2025, and the deadline for filing a mandatory Return generally falls at the end of April, while the calculated personal income tax and military levy liabilities must be paid by 1 August 2026. The obligation to file a Return depends not on a person’s status, but on the type of income and on whether tax was withheld from such income by a tax agent: if the employer has withheld and paid personal income tax from the salary, it is usually not necessary to declare only this income separately, except in cases of voluntary filing of the Return to obtain a tax rebate.
2. Who is obliged to file a return

2.1. Persons who received income without the involvement of a tax agent

The largest group consists of individuals who in 2025 received income from which personal income tax and military levy were not withheld at the time of payment, but such income is not exempt from taxation.

Such income includes, in particular:

• Income from other individuals (residents or non‑residents), for example, rental payments for housing or land, if paid not by a tax‑agent entity, but by an ordinary individual.
• Income from the sale of movable or immovable property, if under the relevant transaction the obligation to pay tax rests with the seller rather than the notary or another tax agent.
• Other income that was not taxed at source but is subject to taxation under the Tax Code (for example, certain types of remuneration not related to employment relationships).

If in 2025 a person received such income, they must report it in the Return and independently calculate and pay the tax liabilities.

2.2. Persons with foreign income

Individuals who are tax residents of Ukraine and who in 2025 received foreign income (salary, dividends, rent, investment income, etc.) are obliged to declare such income and pay personal income tax and military levy, taking into account the rules on avoidance of double taxation. Foreign income is subject to declaration in Ukraine even if tax has already been paid on it abroad, provided that such tax payment is documented.

2.3. Individual entrepreneurs under the general regime

Individual entrepreneurs under the general taxation regime file an Income and Property Tax Return based on the results of the calendar year, reflecting their business income, incurred expenses, and the calculation of net taxable income. For them, this is not an option but a direct obligation, and failure to comply entails fines and additional tax assessments. It should be taken into account that an entrepreneur under the general regime reports differently than single tax payers of groups 1–3, who have their own set of annual reporting forms and, as a rule, do not use the Income and Property Tax Return as the main reporting document for their business activities.

2.4. Persons engaged in independent professional activity

Lawyers, notaries, auditors, insolvency officers, and other persons engaged in independent professional activity are also required to file a Return for the year. In it, they report income from professional activities, expenses, and calculate the tax base. Independent professional activity is in fact treated similarly to entrepreneurial activity in terms of the rules for accounting for income, expenses, and reporting, but is regulated by separate provisions of the Tax Code.

2.5. Persons changing tax residency or leaving for permanent residence abroad

Foreign nationals who, based on the results of 2025, have become tax residents of Ukraine must declare both their Ukrainian and foreign income. Resident citizens who are leaving Ukraine for permanent residence abroad must file an “exit” return no later than 60 days before departure, and failure to comply with these requirements may complicate the formal procedures for changing their place of residence and lead to tax claims in the future.

3. When a return is filed voluntarily
Some taxpayers are not required to file a Return but may do so voluntarily in order to exercise their right to a tax rebate; in this case, the filing deadline is usually extended until 31 December 2026. Most often, a Return is filed voluntarily when there were expenses that give the right to a rebate (education, insurance, mortgage interest, charitable contributions, etc.), since this allows the taxpayer to recover part of the personal income tax paid from official income, in particular from salary. At the same time, all income for the year must be reported in the Return, not only that related to the tax rebate, so the taxpayer should collect complete information on all sources of income, including the main place of work, secondary employment, sale of property, and other transactions.
4. Practical risks and common mistakes
The most common issues include:

• Ignoring income received from other individuals, for example under lease or loan agreements, where no tax agent has withheld tax.
• Failure to declare foreign income due to the mistaken belief that paying tax abroad exempts one from reporting in Ukraine.
• Failure to take into account the obligation to file a Return by individual entrepreneurs under the general system and persons engaged in independent professional activity.
• Incorrect determination of tax residency status for persons who work or reside abroad but retain significant economic interests in Ukraine.

Another group of risks involves formal errors when completing the Return (incomplete information about income, incorrect income type codes, inconsistencies between annexes, lack of supporting documents for the tax rebate), which may serve as grounds for refusal to grant the rebate or for additional tax assessments.

5. The strategic dimension of Declaration‑2026
For many taxpayers, the Return is no longer a one‑off report but a tool for financial and tax planning. In the context of increasing fiscal pressure, higher military levy rates, and tighter control over cross‑border transactions, transparent income declaration becomes an important marker of tax discipline and affects the taxpayer’s risk profile in the eyes of the authorities.

A correctly filed Return makes it possible to:

• avoid fines and additional assessments related to undeclared income;
• legalise foreign income and correctly apply double taxation relief mechanisms;
• exercise the right to a tax rebate and partial refund of paid personal income tax;
• build a transparent income history, which may matter when obtaining financing, participating in investment projects, or confirming the source of funds.

Given the complexity of certain income categories (especially foreign and investment income), as well as current audit practices, it is advisable to analyse your situation for 2025 in advance in order to understand whether there is an obligation to file a Return, which specific income must be reported, and which documents need to be collected.

If you have questions or issues related to determining the obligation to file a return, classifying income, completing the Return itself, or minimising tax risks, you should seek individual advice from a tax consultant or a lawyer specialising in personal taxation.

Author: Ihor Yasko, Managing Partner of the law firm “WINNER”, PhD in Law.