An employee of an auditing company took part in a specialized seminar dedicated to international accounting standards. Who should pay for participation and will such an improvement in the employee’s qualifications be subject to personal income tax (hereinafter – PIT) – read below.
Legal basis for professional training of employees
In accordance with Article 6 of the Law of Ukraine No. 4312-VI of January 12, 2012 “On Professional Development of Employees” (hereinafter referred – Law No. 4312 ), the organization of professional training of employees is carried out by employers taking into account the needs of their own economic or other activities in accordance with the requirements of the legislation. It is carried out directly by the employer, on a contractual basis in vocational and higher educational institutions, at enterprises, in institutions or organizations. At the same time, employers may carry out formal and informal professional training of employees.
Article of Law No. 4312 stipulates that formal vocational training for workers in blue-collar occupations includes initial vocational training, retraining and advanced training for workers, and for workers who, according to the classification of professions, belong to the categories of managers, professionals and specialists, retraining, internship, specialization and advanced training. Based on the results of such training, a document on education of the established sample is issued.
Informal professional training of employees is the acquisition by employees of professional knowledge, skills and abilities, not regulated by the place of acquisition, term and form of training and carried out with their consent directly by the employer at the expense of latter’s funds, taking into account the needs of their own economic or other activities.
Calculation of payment for professional training of employees
The procedure for taxation of income of individuals is regulated by Section IV of Tax Code of Ukraine No. 2755-VI of December 2, 2010 (hereinafter – the Tax Code), clause 165.1.21, item 165.1, Article 165, which provides that the amount paid by any legal entity or individual to domestic higher and vocational educational institutions for the education, training or retraining of the taxpayer, but not exceeding three times the minimum wage established by law as of January 1 of the reporting (tax) year (in 2025 - UAH 8,000.00 x 3) for each full or incomplete month of education, training or retraining of such an individual, is not included in the taxable income of individuals.
Income received by a taxpayer as an additional benefit (except for cases provided for in Article 165 of the Tax Code) is included in the total monthly (annual) taxable income of the taxpayer (clause 164.2.17 of the Tax Code).
According to clause 165.1.37 of the Tax Code, the total monthly (annual) taxable income does not include the amount of employer expenses related to the taxpayer's professional development (retraining) in accordance with the law.
Thus, the amount of funds paid by the employer to domestic higher and vocational educational institutions for the training of an individual, which does not exceed in 2025 UAH 24,000.00 for each month of training and the employer's expenses in connection with the improvement of the employee's qualifications (retraining), are not included in the taxable income of such an individual (employee).
In case of violation of the specified conditions and in the case of exceeding the amount specified in clause 165.1.21 of the Tax Code of Ukraine, the funds paid by the employer for the training of an individual are equated to an additional benefit and are subject to personal income tax at a rate of 18%.
Taxation of participation in seminars and conferences
A seminar is a form of group work with the participation of invited persons, the purpose of which is the exchange of information on a specific topic. A conference is a large meeting lasting one or more days, dedicated to one key issue or topic, divided into narrower issues. Participation in seminars (conferences) involves receiving information and consulting services on the basis of a contract concluded with the organizer of the seminar (conference).
Thus, if the invited party to the seminar (conference) and, under the terms of the contract, the recipient of information and consulting services is a legal entity (employer), whose interests are represented by an employee, then the amount paid by the legal entity (employer) for participation in the seminar (conference) is not the income of such an employee and is not subject to personal income tax.
At the same time, if under the terms of the contract the invited party and recipient of information and consulting services is an employee, then the amount paid by the legal entity (employer) for participation in a seminar (conference) for such an employee should be considered as income received by such an employee in the form of an additional benefit, which is included in the total monthly (annual) taxable income and is taxed at a rate of 18%.
