Ukraine-US treaty: status remains active
The Ukraine-US tax convention has been in force since 2000. Despite the ongoing conflict, the treaty remains active and continues to provide meaningful withholding relief for Ukrainian-resident LLC owners.
Bilateral cooperation on tax matters has been maintained. W-8BEN-E filings under the treaty continue to be honored by US payers.
- Article 7 (Business Profits): Ukrainian-resident operating profits taxable only in Ukraine without US PE.
- Article 10 (Dividends): 5% for 20%+ ownership. 15% standard.
- Article 11 (Interest): 0% on most portfolio interest.
- Article 12 (Royalties): 10% under the treaty.
- Article 24 (Relief from Double Taxation): Ukrainian FTC mechanism.
Withholding rates by income type for Ukrainian residents
| Income type | Default US rate | Ukraine treaty rate |
|---|---|---|
| US-source dividends (20%+ ownership) | 30% | 5% |
| US-source dividends (standard) | 30% | 15% |
| US-source portfolio interest | 30% | 0% |
| US-source royalties | 30% | 10% |
| Business profits without US PE | Generally not taxed | Generally not taxed |
How State Tax Service treats US LLCs
Ukraine's State Tax Service generally treats US single-member LLCs as transparent for Ukrainian tax purposes. LLC operating income flows through to your annual Ukrainian tax return and is taxed at applicable Ukrainian rates.
National Bank of Ukraine has temporary FX restrictions during the conflict. Some USD inflows through the LLC may face NBU rules and reporting requirements. Consult a Ukrainian banking specialist for compliant flows.
How to file W-8BEN-E from Ukraine
- Line 1: LLC legal name
- Line 4: Chapter 3 status: Disregarded Entity
- Line 5: Country of residence: Ukraine
- Line 6: Permanent residence address in Ukraine
- Line 8: US TIN (EIN)
- Line 9: Foreign TIN (your Ukrainian TIN)
- Part III: claim treaty benefits citing the applicable article
Common mistakes by Ukrainian founders
- Assuming the treaty is suspended due to conflict (it remains active)
- Not filing W-8BEN-E with US payers (30% default applies)
- Missing Form 5472 + 1120 ($25K penalty)
- Not declaring LLC income on Ukrainian tax return
- Missing NBU compliance on USD inflows during current FX restrictions
- Applying first to Mercury when Wise Business has more reliable approval during conflict