President Volodymyr Zelenskyy signed the law on taxation of electronic services of non-residents ("tax on Google") No. 1525-IX, the press service of the Office of the President reports.
The Law "On amendments to the Tax Code of Ukraine regarding the abolition of taxation of income received by non-residents in the form of payments for the production and/or dissemination of advertisements, and the improvement of the the procedure for the imposition of value added tax of transactions of supplying electronic services by non-residents to individuals" defines a special procedure for taxation of non-resident companies providing electronic services to persons residing in Ukraine.
This will increase VAT revenues to the state budget. Such taxation regulations are already becoming common practice in other countries, for example, in the countries of the European Union, Australia, Belarus, Kazakhstan, etc.
It is reported that foreign companies that provide electronic services to Ukrainians will be required to register as value-added tax payers using a simplified procedure via a special electronic service if the total amount from the implementation of the relevant transactions exceeds 1 million UAH per year. Non-residents will fill out a simplified accounting report in electronic form in the state or English language.
Transactions of supplying distance learning services via the Internet are exempted from VAT if this network is used exclusively as a means of communication between the teacher and the student. Also, transactions of supplying educational services via access to public educational, scientific and information resources on the Internet from the disciplines and specialties for which the training of applicants for a degree is carried out are exempted from value added tax, if their implementation and provision does not require human participation.
From January 1, 2022, VAT will be canceled if Ukrainian companies pay for services for the production or dissemination of advertisements abroad.
Context. The Rada adopted the law on "tax on Google" on June 3, 2021. Companies like Facebook, Netflix, Steam, and some Apple and Amazon services will have to pay a 20% tax.