An individual’s income from domestic government bonds (OVDP) in 2026 is not subject to either personal income tax (PIT) or the military levy. The coupon is exempt under subparagraph 165.1.2 of the Tax Code of Ukraine (TCU), and profit from the sale or redemption of bonds is exempt under subparagraph 165.1.52, so the investor receives the full amount without withholdings, whereas banks withhold 18% PIT and a 5% military levy — 23% in total — from deposit interest.
You can buy bonds in the Diia app via the “Military bonds” service, in a mobile bank app or through a broker, and the face value of a single paper is 1 000 hryvnia, 1 000 dollars or 1 000 euros. Below we explain what underpins the tax benefit, the yields shown at auctions in autumn 2026, how to place an order and what to consider when selling before maturity.
Why income from OVDP is not taxed
Provision in the Tax Code
According to subparagraph 165.1.2 of article 165 the Tax Code of Ukraine (TCU), interest accrued on government securities is not included in taxable income. Subparagraph 165.1.52 of the same article exempts investment profit from operations with government securities — that is, the difference between the purchase price and the amount received on sale or redemption.
The military levy is also not collected on such income. Paragraph 16-1 of subsection 10 of section XX of the Code exempts from the levy incomes that are not included in taxable income under section IV, and since 23 May 2020 subparagraphs 165.1.2 and 165.1.52 are no longer listed among exceptions to that rule.
Military bonds
“Military bonds” are not a separate type of security — they are the same OVDP whose proceeds are directed to defence needs. The Ministry of Finance (MinFin) sells them at weekly auctions, and in September 2026 military bonds maturing on 15 September 2027 were offered on each of the five auction days.
The tax treatment is the same as for other OVDP. Coupon payments and redemption proceeds are credited to the account in full, and in this case the bank or broker does not act as a tax agent.
Do you need to declare OVDP?
You do not need to submit a separate tax return because of buying or redeeming OVDP, since this income is not taxable. If a person files an annual return for other reasons — for example due to foreign income or sale of property — amounts from bonds are shown as non-taxable income in line 11.3.
The income tax return for 2026 must be filed by 30 April 2027. The tax burden will not change as a result, because non-taxable incomes are only reported in the return.
OVDP yields in 2026
Hryvnia bonds
According to the Ministry of Finance (MinFin), in September 2026 one-year military bonds were placed at a weighted average yield of 15.16-15.18% per annum. All September placements were in hryvnia, and the portfolio of OVDP owned by individuals as of 1 October 2026 reached 167,5 billion hryvnia.
In bank apps the retail rate is usually slightly lower than the auction rate because the bank includes its margin. Longer issues provide different yields than one-year papers, so compare instruments with the same maturity.
Foreign-currency bonds in dollars and euros
The Ministry of Finance places foreign-currency OVDP less often, and their yields are noticeably lower. At the end of February 2026 the weighted average rate on dollar papers was about 3.8% per annum, and on euro-denominated bonds about 3.14%.
Coupon and redemption on such bonds are paid in the issue currency. This is convenient for those who want to preserve savings in dollars or euros while earning a higher return than a typical foreign-currency deposit.
Comparison with a deposit after taxes
The main advantage of OVDP is that the nominal rate equals the net rate. Banks withhold 23% from deposit interest, so a deposit paying 15% per annum yields roughly the same as a bond paying 11.55%.
The table shows a calculation for an amount of 100 000 UAH for one year without reinvesting coupons. Rates are illustrative and based on autumn 2026 levels, and for the dollar bond the amount is shown in UAH equivalent without accounting for exchange-rate changes.
| Instrument | Rate | Tax | Net income from 100 000 hryvnia |
|---|---|---|---|
| OVDP in hryvnia | 15% | 0% | 15 000 hryvnia |
| Deposit in hryvnia | 15% | 23% | 11 550 hryvnia |
| Deposit in hryvnia | 13% | 23% | 10 010 hryvnia |
| OVDP in dollars | 3,5% | 0% | 3 500 hryvnia |
For a deposit to produce the same 15 000 hryvnia net, its nominal rate would need to be about 19.5% per annum. However, a deposit is easier to close early and is covered by the Deposit Guarantee Fund, so the decision depends on more than just the rate.
How to buy OVDP through Diia
Choosing a partner bank
In the Diia app bonds are bought via the “Military bonds” service, and the transaction itself is executed by the chosen bank or investment company. The list of partners is shown in the app, and it is in that institution that a securities account is opened to hold the bonds.
The whole procedure takes a few minutes and does not require a visit to the bank. The purchase flow in Diia is as follows:
- Open the app, go to the “Services” section and select “Military bonds”.
- Choose a bank or broker and the bond issue with the maturity that suits you.
- Check your personal details and the IBAN account to which coupons and redemption proceeds will be credited.
- Sign the investment services agreement, the securities account agreement and the purchase order using Diia.Signature (“Diia.Pidpys”).
- Pay for the order and wait for the bonds to be credited to the securities account.
You can also buy OVDP directly in bank apps, for example in Privat24, monobank, Oschadbank or other institutions that work with government bonds. Brokerage firms typically offer a wider choice of issues and access to the secondary market, but check their fees in advance.
Minimum amount
The nominal value of one bond is 1 000 hryvnia, 1 000 dollars or 1 000 euros depending on the issue currency. The minimum purchase equals one paper, but the actual price may differ slightly from the nominal value due to discount or accrued coupon.
Some banks set their own limits or multiples of purchase. Before paying, check the final amount in the order, not just the number of bonds.
Maturities
OVDP maturities range from several months to several years, and on the maturity date the state returns the nominal together with the final coupon. For example, the September 2026 military bonds mature on 15 September 2027.
Coupons for most issues are paid twice a year. Funds are credited to the account specified at purchase without any tax withholdings.
Risks and liquidity of OVDP
Selling before maturity
The Diia model assumes holding the bond to maturity. To sell earlier you need a bank or broker with access to the secondary market, and the sale price depends on market rates at the time of the transaction.
If rates have risen, the bond may be bought back at a price lower than you paid for it. You should contact the institution where your securities account is opened and check its buyback terms in advance.
Exchange-rate fluctuations
A hryvnia bond does not protect against devaluation, so with a sharp currency move the real return measured in dollars may be lower. A foreign-currency bond removes that risk but pays a much lower coupon.
Government bonds are considered among the most reliable instruments in Ukraine, but they still carry risks. Investors should consider several key ones:
- interest-rate risk: the market price of a bond falls when economy-wide rates rise;
- liquidity risk: it is not always possible to sell a paper before maturity quickly or at a desired price;
- currency risk: for hryvnia OVDP this is devaluation, for foreign-currency issues losses on conversion;
- sovereign risk: payments depend on the state’s solvency, and the Deposit Guarantee Fund does not cover bonds.
Bank and broker fees
Some banks do not charge for online purchases, but that does not mean zero costs. Check the tariff for maintaining the securities account, the commission for selling before maturity, fees for transferring funds and the conversion rate for foreign-currency issues.
Even a small fee noticeably reduces returns on short-term papers. For bonds with maturities of a few months calculate the net yield taking all costs into account.
Tax nuances on sale and redemption
Exchange-rate difference on foreign-currency OVDP
Subparagraph 165.1.52 covers all investment profit from operations with government securities, so exchange-rate gains on foreign-currency bonds are also not taxable. If the dollar strengthened between purchase and redemption, PIT and the military levy are not payable on the hryvnia difference.
The coupon on foreign-currency bonds is also exempt under subparagraph 165.1.2. The tax treatment is the same for papers in hryvnia, dollars and euros.
Selling before maturity at a profit
If a bond is sold for more than the purchase price, the profit is not taxable. This follows directly from subparagraph 165.1.52, and subparagraph (b) of subparagraph 170.2.8 of the Code excludes such operations from the general calculation of investment profit.
Losses from selling OVDP cannot be offset against losses on other securities. In other words, you cannot reduce tax on gains from shares by using a loss on bonds.
Declaration
The most common mistake is for investors to file a return only because of OVDP or to pay tax on coupons themselves. This is not necessary, and if a bank erroneously withheld the military levy you should apply to the bank for a refund.
For tax questions you can request an individual consultation from the State Tax Service (STS). For up-to-date information on issues, rates and auction schedules see publications from the Ministry of Finance (MinFin).
Frequently asked questions
Do I need to declare OVDP?
No, unless you have other reasons to file a return, because income from OVDP is exempt from PIT and the military levy. When a return is filed, coupons and redemption income are shown under the non-taxable income line 11.3.
What is the minimum purchase amount?
The minimum is one bond with a nominal value of 1 000 hryvnia, 1 000 dollars or 1 000 euros. The actual price may differ slightly from the nominal, and some banks set their own limits.
Can you sell OVDP early?
Yes, via a bank or broker with access to the secondary market where your securities account is opened. The price is market-determined at the time of the transaction, so you can incur either a profit or a loss.
Is the exchange-rate difference taxable?
No, the exchange-rate difference on foreign-currency OVDP is included in investment profit exempted by subparagraph 165.1.52. Neither PIT nor the military levy is withheld on it.
