Money from relatives on a bank card does not automatically mean a tax liability. However, for a monetary gift, not only family ties but also the sender's tax residency are important. Even at a zero rate, the bank may ask for documents.
For example, a daughter gives 100 thousand hryvnias to her mother, a tax resident of Ukraine. If the daughter is also a Ukrainian tax resident, a family zero rate applies. If she is a tax non-resident of Ukraine, as a general rule, 18 thousand hryvnias of personal income tax and 5 thousand hryvnias of military levy will have to be paid on the gift. At the same time, the daughter's residence abroad does not by itself determine her tax status.
The Main Directorate of the State Tax Service in Cherkasy Oblast, in the clarification dated October 28, emphasized: the tax consequences depend on the basis for receiving the money, not the transfer method. Repayment of a previously granted loan or reimbursement of joint expenses does not in itself mean receiving taxable income. This is an explanation of current rules, not a new tax exemption.
The rules below apply to monetary gifts from individuals to recipients who are tax residents of Ukraine. Payment for goods, work, or services has a different basis: the payment reference "assistance" does not turn such income into a family gift.
The family zero rate applies when the donor and recipient are tax residents of Ukraine and are family members of the first or second degree of kinship. This includes parents, spouses, children, including adopted children, siblings, grandparents, and grandchildren. Personal income tax and military levy are not paid on such a gift, explains the State Tax Service.
If the donor is another person - a tax resident of Ukraine, as a general rule, the recipient pays 5% personal income tax and 5% military levy. Uncles, aunts, nephews, and cousins are not included in the specified privileged family group.
For a monetary gift from a tax non-resident of Ukraine, the general rule is different: 18% personal income tax and 5% military levy. Close kinship in itself does not eliminate this rate. The basis is the provisions of Article 174 of the Tax Code.
Having a foreign bank card or living abroad does not necessarily mean that a person has ceased to be a Ukrainian tax resident. Relevant factors include where they have a permanent home, where their family lives, and which country has their strongest personal and economic ties. As the State Tax Service explains, spending more than 183 days abroad does not, by itself, automatically end Ukrainian tax residency.
A situation may arise in which Ukraine and another country both consider a person a tax resident under their domestic laws. In that case, the provisions of any applicable double taxation agreement between the two countries must be examined. Such agreements generally contain a sequence of criteria for determining residency for treaty purposes: a permanent home, the closest personal and economic ties, habitual residence and, where necessary, further criteria. The precise rules depend on the relevant agreement — tax residency cannot be determined solely by counting days spent abroad.
A taxable monetary gift received by transfer to a card, as a general rule, must be reported in the annual tax return and the tax must be paid independently. The Code provides an exception for resident recipients who paid the tax before notarization of the gift. The general deadlines are until May 1 of the following year for filing the return and until August 1 for paying self-assessed liabilities. A declaration is not required solely because of a gift at a zero rate.
Bank financial monitoring is a separate check of the transaction and the origin of funds. Therefore, even a non-taxable gift may require explanations if the transfer is unusual for the client or does not match the information known to the bank about their financial situation.
Depending on the request, confirmation of kinship, bank statements, documents about the gift or loan repayment, information about the sender's income may be needed. There is no single mandatory set for each family transfer: the list depends on the circumstances and the bank's request.
400 thousand hryvnias is not a "safe amount" below which there are no checks. Law No. 361-IX classifies transactions as threshold when the amount is 400 thousand hryvnias or more and there are the features provided by it. Suspicious transactions are subject to verification regardless of the amount. The financial monitoring threshold also does not determine a tax benefit.
It is important for the recipient to distinguish between two issues: whether taxable income has arisen and whether they can explain to the bank the basis of the transfer and the origin of the money. A document confirming kinship proves family connection, but does not by itself prove tax residency or the source of funds.
Based on materials from: the State Tax Service in Cherkasy Oblast, the information and reference resource of the State Tax Service, the State Tax Service in Sumy Oblast, the NBU Regulation on Bank Financial Monitoring, Law No. 361-IX.
