Sale of Corporate Rights at Par Value: How to Avoid 23% Taxes
In the modern legal framework of Ukraine, operations with investment assets, including corporate rights, require participants to be extremely precise. The issue considered in the Individual Tax Consultation dated 22.06.2026 No. 3607/IPK/99-00-24-03-03 concerns a classic but complex model: a resident sells their share to another resident at par value, using foreign bank accounts and linking the price to a foreign currency.
Taxable Object and Investment Income Formula
According to the norms of the Tax Code of Ukraine, the resident's total annual income includes investment income. The key point is that not the entire sale amount is taxed, but only the positive difference between the received income and the documented expenses for acquiring the asset.
If the share is sold at its par value, which corresponds to the amount contributed to the authorized capital, then mathematically the investment income equals zero.
In this case, there is no taxable object for personal income tax (PIT) and military levy.
However, the State Tax Service emphasizes that when calculating profit, the exchange rate difference must be taken into account if the contract price is linked to a foreign currency (in this case — the British pound).
Tax Rates: 18% + 5%
If profit arises due to currency fluctuations or the sale price exceeding the par value of the asset, such income is subject to taxation at the following rates:
- 18% — personal income tax (PIT);
- 5% — military levy.
Thus, the total tax burden on net investment income amounts to 23%.
Declaration Mechanism and Self-Accounting
Unlike many other types of income where the tax is withheld by a tax agent, in transactions between two individuals the accounting obligation lies with the taxpayer themselves.
The financial result is accounted for independently, separately from other income. Even if no profit arises, as in the case of sale at par value, the fact of the transaction with investment assets may require reflection in the annual tax declaration to confirm the absence of a tax liability.
Accounts in Foreign Banks
The taxpayer plans settlements between accounts in foreign banks. The tax service in this consultation clearly delineates areas of responsibility. The mere fact of payment through a foreign bank does not change the tax calculation procedure if both parties are residents of Ukraine.
However, the legality of such settlements is regulated by Law No. 2473 "On Currency and Currency Operations." The State Tax Service avoided a direct answer regarding the legality of such a settlement scheme, advising to contact the National Bank of Ukraine.
To ensure that a sale at par value does not turn into taxable income on the entire amount, indisputable evidence of funds contributed to the authorized capital during the establishment or acquisition of the LLC is necessary. Acquisition of the asset is considered the contribution of property or money in exchange for rights.
Even if the contract specifies the par value, using an equivalent in foreign currency obliges the taxpayer to convert amounts into hryvnias at the NBU exchange rate on the transaction date. If the hryvnia equivalent at the time of sale is higher than at the time of capital contribution, investment income will arise, from which 23% tax must be paid.
Settlements between Ukrainian residents through foreign accounts are a high-risk area. Before conducting the transaction, it is necessary to obtain confirmation from the NBU or a resident bank regarding the absence of violations of currency control rules, as fines in this area may significantly exceed the potential tax savings.
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