Video summary

Как НЕ ПЛАТИТЬ налоги на инвестиции в Украине

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Key takeaways

Finance

Finance / tax content summary (Ukraine-focused)

Core Ukrainian taxes on investing (shares/crypto/dividends)

  • Tax residency If you are a Ukrainian citizen, you “owe” taxes to Ukraine regardless of where you live, per Ukrainian rules.

  • Capital gains / speculation on shares (price changes)

    • 18% personal income tax (PIT) + 5% military levy = 23% total on profit
    • Profit is calculated in UAH, including FX/exchange-rate differences.

  • Example: profit measured in UAH + FX effect

    • Buy $1,000 of shares in 2019 → becomes 24,000 UAH
    • Sell later for $1,000, but UAH value is 45,000 UAH
    • “Profit” (in UAH): 45,000 − 24,000 = 21,000 UAH
    • Taxes: 4,830 UAH (~$107)

  • Crypto

    • “Roughly same logic,” but legal clarity is “gray.”
    • Authorities reportedly want tax on gross sale proceeds, not only profit.

  • FIFO / lot accounting for shares

    • Uses FIFO (“first in, first out”) for Ukrainian assets.
    • Brokers (e.g., Interactive Brokers) may allow different accounting methods, especially for international assets (no strict unified practice stated).

  • Dividends

    • 9% personal income tax + 5% military levy = 14%
    • Foreign securities dividends: taxed at 14% total (Ukrainian tax)
    • Ukrainian securities: mentioned as 5% + 5%
    • Government/military bonds: 0% (excluded from tax collection)

When and how taxes are filed/paid (timelines + thresholds)

  • Tax return deadline: by May 1 (explicitly: April 30 mentioned)
  • Tax payment deadline: by August 1
  • Minimum non-taxable threshold (annual revenue)
    • Up to 4,660 UAH annual non-taxable revenue
    • Speaker implies this corresponds to about ~$100 of turnover (sales value), not profit

Tax deferral and performance impact (example numbers)

  • Example assumes 10% annual yield (vs. “mechanically” compared to S&P 500 index).
  • If taxed once at the end: after-tax result is ~8.81% p.a. (example with $100k initial investment).
  • If taxed annually: after-tax yield drops to ~8% p.a.
  • Over 20 years, the difference highlighted: about $70,000 on a $100,000 starting investment.
  • Instruments mentioned: S&P 500 index; also accumulating / accumulating ETFs concept.

Explicit strategies/frameworks to reduce or avoid taxes

1) Dividend tax minimization via accumulating ETFs (“Irish wrapper”)

  • Method

    • Use accumulating ETFs (UCITS/“Irish-domiciled” ETFs referenced; subtitle text appears garbled).
    • Dividends are received by the fund and reinvested inside the ETF, increasing NAV/price.
    • Speaker’s claim: this avoids dividend tax because dividends don’t enter the investor’s brokerage account as cash.

  • Trade-offs / disadvantages

    • Higher fund maintenance costs/commissions
    • Lower liquidity
    • Fewer available funds, reducing flexibility in portfolio construction

  • Caution

    • Applies to accumulating funds; cash dividend stocks still face taxes.

Instruments referenced

  • “Irish accumulating ETFs” (no specific ticker given)
  • Mentions confusing subtitle text like “Ethe(r)eums” / “UKITS,” but context implies UCITS/Irish-domiciled ETFs.

2) For cash dividends on US stocks: treaty form W-8BEN (reduce foreign withholding)

  • Problem

    • Broker may default to 30% US withholding if W-8BEN is not completed.

  • Fix

    • Fill W-8BEN (Ukraine tax resident + US treaty).
    • With W-8BEN: US dividend withholding reduced to ~15% (speaker’s “most common case”).
    • Must be updated periodically: speaker suggests once a year or once every 3 years (wording unclear, but multiple-year cadence is stated).

  • Credit in Ukraine

    • Foreign withholding can offset Ukrainian personal income tax (9%),
    • but cannot offset the military tax (5%).
    • Proof requirement: Ukraine may require documentation (potentially 1042-S or official certificates). Without proof, effective total could be around ~29% (speaker’s stated scenario): 15% US + 9.5% Ukraine, plus discussion of inability to credit military tax and/or documentation issues.

  • Recommendation/caution

    • Speaker states this dividend strategy “died essentially” for most investors due to proof complexity.

3) Income tax avoidance via “no profit” / buy-and-hold + lock capital

  • Concept

    • Build a long-term portfolio aligned with goals.
    • Use accumulating Irish ETFs and keep adding.
    • When the capital target is reached, lock a portion and live off it.

  • Disclosure

    • Speaker conditions this on “if you set up your strategy correctly from the start.”

4) Tax Loss Harvesting (TLH) / loss carryforward (core optimization framework)

  • Year-level netting (net results, not per-trade)

    • Tax base is computed using net results of closed transactions for the year.
    • Example: $30,000 gains + $20,000 losses → taxable base $10,000.

  • Loss carryforward

    • If the year is net negative, losses are carried forward indefinitely until used.
    • Speaker claims Ukraine has no limits (no time cap or amount cap mentioned).

  • Wash sale / cooldown

    • Speaker asserts TLH can be done without a 30-day cooldown (“not necessary in Ukraine”).
    • Optional safety: wait 30 days between selling and buying back.

  • Costs included

    • Broker commissions for round-tripping are included in the taxable base.

  • FX caution

    • Loss/gain figures must consider UAH conversion and exchange-rate differences.

  • Explicit example

    • 2026: loss $30,000
    • 2027: profit $20,000 → net loss $10,000 (still not taxed)
    • 2028: profit $25,000 → only then first net profits taxed (per speaker’s timeline)

  • Important limitation

    • Loss harvesting applies only to investment activities.
    • Cannot offset salary income, sole proprietorship income, or dividends.

5) Gain harvesting + loss harvesting together

  • Method

    • If you have gains in stock A and losses in stock B, you can:
      • realize both,
      • use losses to offset gains,
      • reduce taxable amount while managing cost base.

  • Example mentioned

    • Gain position: Microsoft
    • Loss position: subtitles indicate “Dualing” (unclear ticker/company due to subtitle errors)

6) Derivatives-based profit deferral (hedging without selling shares)

Applies when you want to protect gains without realizing a stock sale (and therefore capital-gains tax).

Protective put

  • Example numbers
    • Nvidia bought at $100, now $180
    • Buy a put with strike $175 for 6–12 months
  • Mechanics
    • If Nvidia drops below $175, the put compensates, “locking” much of the profit.
  • Tax note
    • Speaker notes profit can be realized on the option later; treated as investment profit in the tax return (separate item).

Collar (put + call)

  • Example
    • Nvidia at $180
    • Buy put at $170
    • Sell call at $200
  • Resulting range
    • Limited downside below $170
    • Upside above $200 given away to the call buyer
  • Risk
    • If price moves far above $200 and calls are exercised early, shares could be delivered → realization as a sale and profits become taxable.

“Short against the box” / lock concept

  • Method
    • Long shares + short position in the same underlying to freeze net value today.
  • Risks/cautions
    • Margin/margin call risk
    • Short financing cost (“Borf” / borrow)
    • More complex tax accounting

Futures/CFDs

  • Mention
    • Can hedge via futures or CFDs with larger leverage (“shoulders are bigger”).
  • Venue
    • CME (Chicago Mercantile Exchange) recently opened access to stock futures (per speaker).

Securities-backed loan (liquidity without selling)

  • Method
    • Use shares as collateral and take a loan.
    • Economically not treated as a share sale (aim: tax deferral).
  • Risk
    • Still market risk; debt remains
    • Potential for margin call / renegotiation

Instruments/tickers explicitly referenced

  • Nvidia
  • Microsoft
  • Elon Musk and Jeff Bezos mentioned as illustrative “borrow vs sell” examples
  • CME
  • CFDs
  • Option strikes explicitly cited: $175, $170, $200

Offshore / residency and corporate structuring (macro-level tax strategy)

The speaker discusses legal tax optimization via changing tax residence and/or using holding structures in low/0% capital gains jurisdictions.

Residency “algorithm” (as described)

  • Obtain residency in a new country with:
    • a real basis for residence,
    • housing, insurance, banking,
    • shift center of economic interests,
    • manage Ukrainian residency indicators (including risk that Ukrainian sole-proprietorship turnover may argue continued Ukrainian tax residency).
  • Disputes may turn on whether you still have Ukrainian citizenship; countries claim you’re their resident.
  • Speaker suggests acquiring residency via Emirates and Cyprus as easiest/practical.

Low/0% capital gains jurisdictions named

  • Emirates (UAE)

    • 0% capital gains via qualified free zone status
    • Speaker says: requires 0% qualifying income and holding asset for at least 12 months.

  • Cyprus

    • From 2026 corporate tax = 15%
    • But “profit from sale of corporate titles” remains 0%
    • “Corporate titles” defined broadly: shares, bonds, options, forwards, SVPs, depositary receipts, UCITS funds, etc.

  • Singapore

    • No capital gains tax “at all,” but 17% “tax for trading/targeting” if activity looks like trading, leverage, options, or high frequency.

  • Hong Kong

    • Similar logic to Singapore: trading vs capital-gain characterization.

  • Estonia

    • Company doesn’t pay corporate income tax on profits until distribution.
    • Distribution example mentioned: 22% from 2025 (year reference inconsistent in subtitles).

  • Cayman Islands

    • “Real 0%” capital gains and no corporate tax / no withholding for companies
    • Downside: high compliance costs, complex substance requirements, banking, Economic Substance Analysis, “QYC” mentioned
    • Speaker states dividends still subject to 30% tax

US estate tax risk (large capital)

  • If Ukrainian is a non-US person and lacks residency/citizenship, US may apply estate tax on death for US assets (e.g., shares in US companies).
  • Threshold: over $60,000 triggers filing (Form 706-NA).
  • Max rate: up to 40% progressive scale.
  • Exposure depends on issuer/asset, not broker location (e.g., even if broker is Irish/German).

US dividend/gift and basis reset concepts

  • Donation/gift
    • Gift of US stock by a US nonresident is generally not subject to US gift tax (intangible asset).
    • Ukraine gift taxation similar to inheritance; first/second degree kin: 0% gift rate.
  • Basis reset caution
    • Recipient’s future sale basis equals “state duty + VAT paid on gifting,” effectively giving near zero cost basis, potentially causing capital gains tax on later sale.
    • Warning that transferring to relatives “for free” may not avoid capital gains if they later sell.

Investment exit + re-entry algorithm (as stated)

  • Build portfolio (speaker suggests Irish funds).
  • Obtain residency (UAE/Cyprus).
  • Sell entire portfolio and “fix all capital gains at rate of zero.”
  • Open a company in Emirates/Cyprus/Caymans.
  • Continue compounding.

Disclaimer/caution: Speaker says rules may change and advises verifying with lawyers for up-to-date treatment, especially for large capital.

Disclosures / data reporting (CRS) and whether Ukraine sees brokerage accounts

CRS awareness

  • Claim: since 2024, Ukraine automatically exchanges information under CRS with included jurisdictions.
  • If you are a Ukrainian tax resident, the broker sends tax data.

Specific brokers mentioned

  • Freedom Finance

    • Speaker: “most likely yes”
    • Broker in Cyprus; Cyprus participates in CRS exchanges with Ukraine (per speaker).

  • Interactive Brokers (IBKR)

    • Speaker claims IBKR sends data based on:
      • client tax residency, and
      • account entity location.
    • If the account is opened in a US entity, then “no CRS” (speaker’s claim: because CRS exchange with the US doesn’t apply).

What the tax office receives (CRS fields listed)

  • Name, address, tax ID
  • Brokerage account number and financial institution details
  • Account value/balance at year-end
  • Gross dividends and interest
  • Other investment income
  • Gross proceeds from sales/redemptions, not just net profit
    • Example: selling $1.5M worth can create large “turnover” even if net profit is smaller.

Deadlines mentioned

  • CRS described as:
    • info for the previous year submitted within 9 months after year-end → roughly by September 30
  • Speaker emphasizes uncertainty and states there were no confirmed cases of charges for CRS non-payment at the time of the video.

How to check where your brokerage account is opened (IBKR)

  • In IBKR reports:
    • Income and Reports → Other reports → Confirmation of account opening
  • Look for whether the entity is “Interactive Brokers LLC” vs entities like Ireland/UK to infer CRS coverage.

No explicit tickers tied to CRS, but brokers named

  • Freedom Finance
  • Interactive Brokers (IBKR)

Key numbers extracted

  • 23% total capital gains tax on Ukrainian profit (18% + 5% military levy)
  • 14% tax on dividends from foreign securities (9% + 5%)
  • 18% PIT + 5% military levy (multiple mentions)
  • 4,660 UAH annual non-taxable threshold
  • Deadlines: Apr 30/May 1 filing; Aug 1 payment
  • Example yields: 10% index/yield; after tax ~8.81% p.a. vs ~8% p.a.
  • Derivatives examples:
    • Nvidia strikes: $175 (put), $170 (put), $200 (call)
    • Put maturity: 6–12 months
  • Treaty: W-8BEN reduces US withholding from 30% to ~15%
  • US estate tax:
    • Threshold $60,000
    • Max rate up to 40%
    • Form 706-NA
  • Corporate jurisdictions:
    • Cyprus corporate tax from 2026: 15% (but capital gains on “corporate titles” 0%)
    • Estonia distribution example: 22% (year reference inconsistent)
    • Singapore “trading-like” tax: 17% (speaker wording)

Presenter / sources mentioned

  • Polenik (Code Finance / Finance, freedom) — channel/presenter referenced throughout
  • Interactive Brokers (broker source cited)
  • CME (Chicago Mercantile Exchange) (venue referenced)
  • Freedom Finance (broker cited)
  • Historical/illustrative people mentioned:
    • Elon Musk
    • Jeff Bezos (used as examples for “borrow vs sell” style tax deferral)

Original video