• Residents.

Residents shall be understood as legal entities and subjects of business activity of Ukraine not having legal entity's status (affiliates, representative offices, etc.), established, located on the territory of Ukraine and engaged in their business activities in accordance with the Ukrainian legislation.

(Par.1.15 Article 1 of the Law of Ukraine "On Profits Taxation of Enterprises " (in edition as of May 22, 1997 N283/97 SR with changes and amendments).

• Non – Residents.

Non –Residents shall be understood as legal entities and subjects of business activities not having legal entity status (affiliates, representative offices, etc.), located outside of Ukraine, created and engaged in their activities in accordance with the legislation of another country; diplomatic representative offices of foreign countries located on the territory of Ukraine; international organizations and their representatives having diplomatic privileges and immunities, as well as representative offices of foreign organizations and companies not engaged in business activities in accordance with the legislation of Ukraine; citizens having permanent residence in other country but receiving incomes originating from Ukraine.

• A Permanent Representative Office of a Non-Resident in Ukraine.

A permanent representative office of a non-resident in Ukraine is a permanent place through the non-resident's activity is carried out (partially or in full) on the territory of Ukraine. In particular, to permanent representative offices belong: management location, affiliate, office, plant, factory, workshop, mine, petroleum or gas wells, opencast mine or the other place of prospecting or extraction of natural resources. For the taxation purposes, residents having authorization to act on behalf of a non-resident are equated with permanent representative offices; this entails appearance of the non-residents' civil rights and liabilities (such as to conclude contracts on behalf of a non-resident; to maintain (store) stocks of goods pertained to a non-resident, delivery of the goods, held in the stock is effected on behalf of the non-resident, except for the residents having the status of customs store). Residents, equated with the permanent representative offices for the taxation purposes, are not subjects to the additional registry in tax bodies as taxpayers.

• Business Activity of a Non-Resident.

Business activity of a non-resident carried out through permanent representative office is an activity of a permanent representative office directed to receiving profits in money, material or non-material form by a non-resident.

For the taxation purposes, a permanent representative office is equated with a taxpayer conducting his/her business activity irrespective of such non-resident. This means that profit received by a non-resident from business activity carried out through permanent representative office is a profit that the permanent representative office would obtain as a result of its business activity irrespective of the non-resident.

Profits originating from Ukraine are profits received by residents or non-residents from any of their business activity on the territory of Ukraine, including interests, dividends, royalty and other passive revenues paid by residents of Ukraine, revenues from providing property located in Ukraine for lease to residents or non-residents, including rolling stock of transport ascribed to harbors located in Ukraine, profits from selling real estate objects located in Ukraine, profits received in the form of deposits and risk insurance and re-insurance bonuses on the territory of Ukraine, as well as profits of resident insurance agents from risk insurance of insured residents of Ukraine, other profits from business activities within the customs territory of Ukraine or territories under the Ukrainian customs control.