Taxes on ОВГЗ: how government bond income is taxed
The tax regime is one of the main reasons Ukrainian retail investors choose ОВГЗ over deposits: coupon income is exempt from personal income tax.
The exemption
Coupon income from ОВГЗ is exempt from Ukrainian personal income tax (ПДФО) for residents. The exemption is set in the Tax Code and applies to government bonds regardless of the currency they are issued in.
The military levy
The military levy (військовий збір) does apply to coupon receipts. The bank or broker that pays you the coupon acts as the tax agent and withholds it automatically — you receive the net amount and normally have nothing to file for coupon income.
ОВГЗ vs deposit, after tax
Interest on a bank deposit is taxed at the full 18% personal income tax plus the military levy. ОВГЗ coupons skip the 18% entirely. On identical headline rates the bond therefore delivers meaningfully more net income — and UAH bond coupons are often higher than deposit rates to begin with.
Selling before maturity
If you sell a bond on the secondary market before maturity, any trading gain is a separate question from coupon income and may be taxed differently. The rules depend on how the operation is structured and who acts as the tax agent — confirm the treatment with your broker or a tax advisor before selling.
Not tax advice
Tax rules change, and individual situations differ — especially for non-residents, who should check both Ukrainian withholding rules and any double-taxation treaty with their home country. Treat this page as orientation, not advice, and verify current rates with your bank, broker, or tax advisor.