How does the new tax on deposits income work?

On July 4, 2014 Ukrainian Parliament (Verkhovna Rada) adopted the Law No. 1588-VII "On Amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on passive income." According to the Act, inter alia, a tax on income from deposit and other accounts is put into effect.

According to this law, starting from August 2, 2014 interest income of depositors*, regardless of the amount of the deposit and interest received thereon, shall be taxed at the rate of 15%.

Experts of FUIB together with «Baker Tilly» have demonstrated on infographic, how this tax will work.

This infographic shows the ratio of the size of the tax and the amount of income received on deposit. Calculations are made on the example of the interest rate on the deposit "Profitable" with interest payable at the end of 90 days, which FUIB offers as of 08.08.2014

• paragraph 165.1.2. - Income received by the taxpayer in the form of interest accrued on the securities issued by the central executive body implementing the state fiscal policy and debt obligations of the NBU;
• paragraph 165.1.41. — Income in form of interest on current bank accounts, which are used only for payment of wages, educational fellowship, pensions, social assistance and other statutory social benefits in favor of individuals . Indicators of such accounts are defined by the National Bank of Ukraine.