According to p. 4.2.8. of the Law of Ukraine “About profit taxation” money involved in joint investment from investors, income from operations with assets of institutes of joint investment (IJI) and income accounted on assets of IJI are not being include in gross income of IJI.

In other words, unit and corporate investment fund are freed from profit taxation. At the same time we have to understand that it takes place only while money are in assets of the fund.

Investors’ income is taxed when:

-          selling of securities of the fund to third person (not the fund);

-          selling of securities of the fund to the fund (for example, selling of securities at the moment of closing the fund – for closed funds, in any day for opened funds and in dates written in prospectus of emission for interval funds);

-          paying of dividends to investors in case of taking of appropriate decision by responsible person of the fund.

In case of selling of fund’s securities only difference between buying and selling of it is being taxed. In case of dividends – amount of it is being taxed.

Tax rate depends on type of investor – physical or juridical person he/she is and on the situation above.

In case when investor is a juridical person, its income taxes by 25%. Order of income taxation of juridical persons from operations with securities is regulated by Law of Ukraine “About income taxation of companies”.

Order of income taxation of physical persons from operations with securities is regulated by Law of Ukraine “About income taxation of companies”(in part of definition of tax base) and Law of Ukraine “About income taxation of citizens”.

Income as dividends is taxed by 5% and income from selling of securities of the fund is taxed by 15%.