Can Ukrainians be charged additional taxes for transfers to a bank card: what you need to know

In Ukraine, transfers to personal bank cards have become a common way of making financial payments – from household payments to selling goods or receiving assistance. At the same time, many citizens have a question: can the State Tax Service of Ukraine additionally charge taxes due to regular receipts to the account?

Is there a “tax on transfers”

Ukrainian legislation does not provide for a separate tax on bank transfers. The very fact of receipt of funds to the card does not mean the automatic occurrence of a tax liability. It is not the transfer as such that is taxed, but the income of an individual.

According to the norms of the Tax Code of Ukraine, the following are not subject to taxation:

state and social assistance;

compensations;

maternity benefits;

payments to persons with disabilities;

other social payments from the budget or social insurance funds.
When the tax authority may be interested in transfers

Risks arise when receipts to the card have signs of systematic income, but are not declared and not taxed.

These include:

regular transfers of the same type;

significant amounts of income;

transfers from a large number of individuals;

actual conduct of business through a personal card without registering as an individual entrepreneur.

In such cases, the tax authority may consider transactions as income from business activities and charge additional taxes.

What taxes may be charged

If the regulatory authority proves the fact of receiving untaxed income, an individual may be charged:

18% personal income tax;

5% military levy;

fines and penalties.

According to the Tax Code of Ukraine, the fine may be 25% of the amount of additional tax, and in case of repeated violation – 50%.

Does the tax authority have access to bank accounts

Information on the movement of funds in accounts is a bank secret in accordance with the Law of Ukraine “On Banks and Banking Activities”. The tax authority does not have automatic access to citizens’ accounts.

At the same time, banks are obliged to carry out financial monitoring and can check the origin of funds in the event of suspicious transactions. In cases specified by law, information can be transferred to authorized bodies.

Judicial practice

There are already court cases in Ukraine where the tax authority analyzed regular receipts to bank cards of individuals.

In one of such cases, the regulatory authority established the receipt of undeclared income in the amount of more than 3.5 million UAH. As a result, the person was additionally assessed:

over 638 thousand UAH of personal income tax;
over 53 thousand UAH of military duty;
penalties and interest.

The court supported the position of the tax authority, since the payer was unable to confirm the origin of the funds and did not file an income declaration.

Thus, transfers to the card themselves are not taxable. However, if they have signs of income and are not declared in accordance with the requirements of the law, this may become the basis for additional tax assessments.