There is no requirement to register prize promotions.
Tax aspects of prize promotions are as follows:
Corporate Profit Tax (CPT)
Basic CPT rate is 18%. Generally, the cost of prizes purchased by a prize promotions operator is deductible for CPT purposes. The general approach of the Ukrainian tax authorities is that all deductions must be supported with the appropriate original documents.
Value Added Tax (VAT)
Generally, the transfer of prizes by the prize promotions operator to the winner is treated as a taxable supply for VAT purposes (if such operator is a VAT-payer). Thus, prize promotions operators must charge 20% VAT on the value of the prize but in any case the VAT base may not be lower than the purchase price of such prize. Such VAT is not collected from prize winners and is paid by operators at their own expense.
Personal Income Tax (PIT)/Military Duty
Basic PIT rate is 18%. Temporary military duty is 1.5%.
Prize promotions operators are obliged to act as a tax agent for the winner. If the amount of the prize value is less than UAH 1043.25 per (for 2019) (approx. US$39), it is exempted from PIT and military duty.
Prize promotions operators are liable to pay PIT and military duty on behalf of the winner if the prize amount exceeds UAH 1043.25 (for 2019) (approx. US$39). In cases where the prize is provided in non-monetary form, WHT and PIT are paid by prize operator at its own cost (on top of the value of prizes).
It is also important to note that operators cannot act as tax agents in those cases where prizes are distributed to an unidentified recipient.
Lotteries have further specific tax treatment.
Last modified 11 Jan 2019