Tax & Legal Alerts

President signs Law No. 1946-IX “On Amendments to the Tax Code of Ukraine regarding the Stimulation of Digital Economy Development in Ukraine”

Tax & Legal Alert

On 20 December 2021, the Ukraine president signed Law No. 1946-IX dated 14 December 2021 (“Law 1946-IX”) that provides a special tax regime for Diia City residents and their employees, gig-contractors and investors.

A majority of the provisions mentioned below will come into effect as from 1 January 2022.

Draft Law No.5600 on Amending the Tax Code is sent to the President for signature

Tax & Legal Alert

On 20 December 2021, the President signed Draft Law No.5600 on Amending the Tax Code of Ukraine and Certain Legislative Acts of Ukraine Aimed at Ensuring Balanced Fiscal Revenue (hereinafter, the Draft Law). The Draft Law introduces substantial changes to the tax legislation.

This alert provides a summary of key tax rules set out in the Draft Law that will have an effect on Ukrainian business. Changes to the Tax Code are effective from 01 January 2022, except for certain clauses specified below.

The State Tax Service of Ukraine published an information letter on the peculiarities of VAT taxation of electronic services supplied by non-residents to Ukrainian individuals

Tax Alert

On 10 December 2021, the State Tax Service of Ukraine published an information letter on the peculiarities of VAT taxation of electronic services supplied by non-residents to Ukrainian individuals.

It generally repeats many of the provisions of the Tax Code of Ukraine, in particular, the concept and types of electronically supplied services (hereinafter, the “ESS”), the place of ESS supply, details of non-resident’s registration as VAT payer in Ukraine and payment of VAT liabilities, etc.

The Ministry of Finance of Ukraine drafted and made public two orders that approve the form of an electronic request from the tax authority to a non-resident for general information on the supply of electronic services, the forms of tax notification to non-resident, and calculation of tax liabilities

Tax Alert

Two draft orders of the Ministry of Finance of Ukraine were published on the official web-portal of the State Tax Service, namely:

• Draft Order “On approval of the forms of electronic request from the tax authority to a non-resident for general information on the supply of electronic services to individuals in the customs territory of Ukraine, the cost of supplied services, and the terms of payment” (hereinafter, the Draft Order on Electronic Request), and
• Draft Order “On approval of the forms of tax notification to a non-resident and calculation of tax liabilities.”
  

The Ministry of Finance of Ukraine approved the form and procedure for filing a simplified VAT return and published its Draft Order "On Approval of the Procedure for Electronic Identification of Non-Resident Suppliers of Electronic Services"

Tax Alert

By its Order #555, the Ministry of Finance of Ukraine has approved the final form and procedure for filling in and filing a simplified VAT Return. The Order is supposed to take effect on 01 January 2022, but not before its official publication. 

The Ministry of Finance of Ukraine has also published a Draft Order "On Approval of the Procedure for Electronic Identification of Non-Resident Suppliers of Electronic Services" on the official web-portal of the State Tax Service. It sets out the framework for VAT reporting and compliance electronic portal, through which all communication between non-residents and tax authorities will be done.

The Ministry of Finance of Ukraine drafted and made public its orders intended to approve a simplified VAT Return form, procedure, and application for non-resident VAT payer registration

Tax & Legal  Alert

Two draft orders of the Ministry of Finance of Ukraine were published on the official web-portal of the State Tax Service, namely:

• Draft Order “On amendments to the Regulation on registration of VAT payers,” and
• Draft Order “On approval of the form and procedure for filling in and filing of a simplified VAT Return.”

Ultimate beneficial owners disclosure underway

Tax & Legal  Alert

To recap, Order of the Ministry of Finance of Ukraine No. 163 “On approval of the Regulation on the Ownership Structure Form and Substance” dated 19 March 2021 (the “Order”) entered into force on 11 July 2021.

In this context, all Ukrainian companies must disclose information about their ultimate beneficial owners (“UBOs”) in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations (the “Register”) and submit the information on the company’s ownership structure in free form by 11 October 2021.

Ukrainian Parliament adopted in the second reading a draft law “On the Stimulation of Digital Economy Development in Ukraine”, No. 4303

Tax & Legal  Alert

On 15 July 2021, the Ukrainian Parliament adopted in the second reading and in general the basic draft law “On the Stimulation of Digital Economy Development in Ukraine”, No. 4303 dated 02 November 2020, aimed at launching a special regime "Diia City", which provides for a number of measures to stimulate the development of IT industry.

Ukraine ratified the Protocol to Tax Convention with the Netherlands

Tax & Legal  Alert

On 15 June 2021, the Ukrainian Parliament passed a law ratifying the Protocol amending the Convention between the Netherlands and Ukraine for the Avoidance of Double Taxation (the “Convention”).

The President of Ukraine has signed the Law on VAT taxation of services electronically supplied by non-residents to Ukrainian individuals

Tax & Legal  Alert

On 29 June 2021, the President of Ukraine signed Law “On Amending the Tax Code of Ukraine on the Abolition of Taxation of Income Received by Non-Residents in the Form of Payment for Production and / or Distribution of Advertisements and the Improvement of Value-Added Taxation of Transactions involving the Supply of Electronic Services by Non-Residents to Individuals”, No. 1525-ІХ.

Amnesty for individuals: new opportunities for voluntary declaration of assets and income

Tax & Legal  Alert

On 15 June 2021, the Verkhovna Rada of Ukraine passed the second reading of the draft law registered under the number 5153 on 25 February 2021 (the “Law”), which introduces a so-called “tax amnesty” or “capital amnesty” for individuals.

It's time to disclose the ultimate beneficial owners

Tax & Legal  Alert

On 11 July 2021, Order of the Ministry of Finance of Ukraine dated 19 March 2021, No. 163 “On approval of the Regulations on the form and substance of ownership structure” (“Order”) will enter into force.

Draft law on VAT taxation of services electronically supplied by non-residents to Ukrainian individuals is adopted and being prepared for the signature of the President of Ukraine

Tax Alert

On 03 June 2021, the Ukrainian Parliament adopted a draft law “On Amending the Tax Code of Ukraine on the Abolition of Taxation of Income Received by Non-Residents in the Form of Payment for Production and / or Distribution of Advertisements and the Improvement of Value-Added Taxation of Transactions involving the Supply of Electronic Services by Non-Residents to Individuals”, No. 4184 dated 02 October 2020 (hereinafter, the “Draft Law”).

Draft law on the «Diia City», а special regime for IT companies in Ukraine, was adopted in the first reading

Tax & Regulatory Alert

On 15 April 2021, the Ukrainian Parliament adopted in the first reading a draft law “On the Stimulation of Digital Economy Development in Ukraine”, No. 4303 dated 02 November 2020 (hereinafter, “Draft Law 4303”). In addition to the mentioned act, on 14 April 2021, the Ukrainian Parliament also registered the accompanying draft law “On Amendments to the Tax Code of Ukraine regarding the Stimulation of Digital Economy Development in Ukraine”, No. 5376 (hereinafter, “Draft Law 5376”).

Mandatory Registration of Non-residents with Ukrainian Tax Authorities

The BEPS legislation passes in Ukraine in 2020 mandates that non-residents that operate in Ukraine through representative offices or permanent establishments must register with the tax authorities before 31 March 2021. This tax registration will be different from the registration of a representative office/permanent establishment.

CMU begins lifting the moratorium on tax audits

On 9 February 2021, the Resolution of the Cabinet of Ministers (hereinafter – “CMU”) “On reducing the term of restrictions relating to the moratorium on certain types of audits” came into force.

Draft law on VAT taxation of services electronically supplied by non-residents to Ukrainian individuals was adopted in the first reading

On 17 February 2021, the Ukrainian Parliament adopted in the first reading a draft law “On Amending the Tax Code of Ukraine on the Abolition of Taxation of Income Received by Non-Residents in the Form of Payment for Production and / or Distribution of Advertisements and the Improvement of Value-Added Taxation of Transactions involving the Supply of Electronic Services by Non-Residents to Individuals” No. 4184 dated 02 October 2020 (hereinafter, the “Draft Law”).

Important changes in tax and legal legislation coming into effect in 2021

We have prepared this alert to give an overview of key changes in tax and legal legislation that take effect in 2021. Our review is arranged into the following main topic areas: Corporate Taxation, Transfer Pricing, International Taxation, Individual Taxation, Other changes.