The US withholds tax from dividends of American companies before the money reaches your account: 30% by default, or 15% if you have given your broker Form W-8BEN confirming that you are a tax resident of Ukraine. In Ukraine the same dividends are subject to 9% personal income tax and 5% military levy, which you declare yourself. Hardly anyone can credit the US tax, because the State Tax Service requires an apostilled IRS transcript, so in practice USD 100 of dividends leaves you about 71 with W-8BEN and 56 without it.
Oleksandr Suhak
12 min read
A US company declares a dividend per share and an ex-dividend date. If the shares were in your account before that date, the broker credits you on the payment date. But not the full amount: US tax is withheld by whoever pays the income before it is credited. Excess tax is not refunded to foreigners automatically, so it matters to get the right rate from the start.
The dividend then becomes your foreign income in Ukraine. A Ukrainian broker sometimes withholds Ukrainian tax itself, while a foreign broker never does: in that case you declare the income yourself the following year. So there are two levels of tax, American and Ukrainian, each with its own rules.
| Level | Rate | What it depends on |
|---|---|---|
| US, without W-8BEN | 30% | The broker has no proof of your residence |
| US, with W-8BEN | 15% | The US-Ukraine double tax treaty |
| US, REIT dividends | 30% | The reduced treaty rate does not extend to real estate trusts |
| Ukraine, personal income tax | 9% | Dividends from non-residents, Tax Code 167.5.4 |
| Ukraine, military levy | 5% | Always payable, US tax does not reduce it |
W-8BEN is an IRS form in which an individual confirms that they are neither a US citizen nor a US tax resident and, where relevant, claims a benefit under an international treaty. The form goes to the broker that pays the income: the IRS instructions state plainly that it should not be sent to the IRS.
Without the form, the broker must withhold 30% from dividends, the default rate for foreigners. Ukraine and the US have a double tax treaty, and under Article 10 US tax for a portfolio investor is capped at 15%. The 5% rate in the same article applies to companies with a large stake and does not apply to private investors.
Foreign brokers usually ask you to complete W-8BEN when you open the account. You can check whether the form has been accepted in the account's tax documents or from the rate withheld on your first dividend. If it is 30%, the form was not accepted or has expired.
With Ukrainian brokers things are more complicated. Foreign securities are held at a foreign depository in the broker's omnibus account, and the reduced rate applies only if your details are passed along the chain of custodians. Ask the broker before buying which rate is withheld from US dividends and whether you need to submit anything. How to choose a broker and buy your first share is covered in how to buy US stocks from Ukraine.
Brokers usually offer an electronic version with prompts, but the fields are the same as in the IRS paper form.
For a Ukrainian resident, dividends from foreign companies are subject to personal income tax at 9% and military levy at 5%. That is lower than the 18% that applies to salaries or profit from selling shares. The base is the full dividend before US withholding, converted into hryvnias at the official NBU rate on the date of receipt.
If dividends arrive quarterly, each payment is converted at its own rate. For a portfolio of several companies a simple table helps: date, company, gross amount, US tax withheld, NBU rate, amount in hryvnias.
The Tax Code allows you to reduce Ukrainian personal income tax by tax already paid abroad if there is a double tax treaty with that country. The credit cannot exceed the Ukrainian personal income tax on that income, so of the 15% US tax only 9% can be credited. The military levy is outside international treaties and is paid in full.
The main obstacle is the document. The credit requires a certificate from the tax authority of the country where the tax was paid, showing the tax amount and the taxable base. In its clarification of 24 February 2026, the State Tax Service in Luhansk region specified that for the US this document is an IRS transcript: it must be apostilled, notarised and translated into Ukrainian. Form 1042-S, which the broker sends every year, does not by itself give the right to a credit: it is prepared by the withholding agent while what is needed is a document of the tax authority itself, so 1042-S is filed only as an attachment to the transcript.
A transcript can be obtained only with a US tax number, an SSN or ITIN. Most Ukrainian investors do not need one and do not have it, and according to the IRS instructions an ITIN is issued together with a filed US tax return, except in specific cases. So crediting a few dozen dollars of tax would mean filing a US return, waiting for the number, then ordering a transcript, an apostille and a translation. For small amounts this costs more than the tax itself, so most investors pay the full 9% and 5% in Ukraine.
The gap between the second and third rows, 9 out of every USD 100, is the price of a document most people cannot get. The gap between the first and second rows, 15 out of 100, is the price of one form that takes ten minutes to complete.
Foreign dividends for the year go in the annual tax return on property and income. The procedure:
If you also sold shares, the profit from the sale goes in the same return, but under different rules and at 18% plus 5%. How to calculate investment profit and account for losses is explained in detail in the article on taxes on trading shares.
Exchange-traded funds registered in the US are legally investment companies, and their distributions are taxed as dividends. According to the IRS table, Ukrainian residents get the same 15% rate on them with W-8BEN.
Real estate investment trusts, REITs, are different. They usually pay high dividends, but for Ukraine the reduced treaty rate does not extend to them: the US withholds 30% even with the form. Together with Ukrainian taxes and no credit that makes 44%, and much of a REIT's high yield disappears for a Ukrainian.
Accumulating funds reinvest dividends inside the fund and pay nothing out. You do not have to declare small payments every year, and Ukrainian tax is paid only on the profit when you sell units, at 18% plus 5%. Tax on the companies' dividends is still paid at the fund level; you just do not see it. Distributing and accumulating funds are compared in the article on ETFs and index funds.
A few percentage points of tax look small, but dividends are usually reinvested for years, and the loss compounds. Let us count only the dividend part, without any change in share prices.
You can test your own scenario with a different amount, yield and period in the compound interest calculator: enter the dividend yield after all taxes as the rate.
Shares of US companies count as US property even if you hold them with a European broker. If a non-resident owner dies and the value of their US assets exceeds USD 60,000, the executor must file an estate tax return with the IRS. For US citizens and residents the threshold is many times higher, and Ukraine has no separate estate tax treaty with the US.
W-8BEN does not protect against this: the form concerns only income tax. For large portfolios, investors take this into account when choosing between US-registered funds and funds registered in other countries, and tell their family in advance where and how the assets are held.
If you are still choosing a foreign broker, check its licence and regulator using the guide on how to check a broker.
Checked against official sources on October 29, 2026. If a figure changes, we update the article and the «Updated» date changes automatically.
This article is for information only and is not tax or investment advice. The exchange rate and yield in the examples are illustrative. The State Tax Service's position on documents for crediting foreign tax may change; check current guidance on its website or consult a tax adviser before filing.
Spotted a mistake or an outdated figure? Let us know and we will check it against the primary source and fix it.
Write to redaktsiia@wm2.com.ua: what is wrong and, if possible, a source with the correct information. In Gmail or your mail app the page address will already be in the message.
Step by step from a securities account to your first trade: order types, fees on small amounts, tax on profit in hryvnias, three layers of dividend tax, single stocks or a fund.
How exchange-traded and index funds work, what fees cost over 20 years, how to buy an S&P 500 fund from Ukraine within the NBU limit, dividends or reinvestment, and taxes.
Rates by instrument, a worked example with the exchange rate difference, how to avoid double tax, the status of crypto tax and step-by-step declaring.