A special web-portal for non-residents supplying electronic services in Ukraine is set up

Set-up of special web-portal (in a test mode)

The State Tax Service of Ukraine (hereinafter, the “STSU”) has launched a special web-portal for non-residents supplying electronic services to Ukrainian individuals. The portal will allow non-residents to register as VAT payers in Ukraine, to file and submit VAT returns, to pay VAT liabilities to a special treasury account of the State budget of Ukraine, to communicate with the STSU representatives, to receive tax payment notifications, etc. To access the portal, please follow the link. Right now the portal operates in a test mode.

Information letter on the specifics of VAT registration of non-residents

Furthermore, on 30 December 2021, the STSU published an information letter on the specifics of the non-resident’s registration as a VAT payer and on the submission of VAT returns.

The information letter generally repeats many of the provisions of the Tax Code of Ukraine (hereinafter, the “TCU”), in particular:

• the terms for filing an application for mandatory and voluntary registration as a VAT payer;
• the date from which the VAT payer status becomes active (for mandatory and voluntary registration cases);
• notification of the fact of registration as VAT payer, etc.

Application form for VAT registration

The letter provides explanations on how to fill in specific sections of the non-resident’s application form for obtaining a VAT payer status. We draw your attention to the necessity to provide:

• Identification (registration, accounting) number (code) of the non-resident in its country of residence/registration. In addition to company’s identification number, the non-resident should also indicate the country where such identification number was issued. Country is selected using the search by code, name or a two-digit alpha-2 code according to the List of country codes for statistical purposes available on the link.
• Address of the web-portal with the relevant business register (trade, banking or other register, which contains records of the state registration of a company, organization). This information is provided so that the STSU representatives could verify the identification number provided by the non-resident in open online sources. In case the data from web-portal of the relevant business register is not available for public access, the non-resident should indicate the phrase “information is not available”, instead of providing the web-portal address.
• Non-resident taxpayer’s identification number or its equivalent. If the non-resident does not have a tax identification number (hereinafter, “TIN”), the phrase "NOTIN" is to be indicated. Name of the country that issued TIN should also be indicated. Country is selected using the search by code, name or a two-digit alpha-2 code, according to the List of country codes for statistical purposes, available on the link.
• Address / country of residence. Country is selected using the search by code, name or a two-digit alpha-2 code, according to the List of country codes for statistical purposes, available on the link.
• Contact phone numbers and e-mail address of the contact person. The company should provide contact information of the responsible person who is authorized to communicate with Ukrainian tax authorities regarding any issues related to Ukrainian VAT. Such data may coincide with the representative's data indicated in further sections of the Application.
• Website address. The STSU clarified that the non-resident should indicate the address of the website where public information about such non-resident as an electronic services provider is posted. It may not always be the non-resident’s own website address.
• Electronic services provided by the non-resident via the Internet. Services are not to be described manually, but should be selected from Annex 2 to the Application form ("Electronic Services Directory"). If the non-resident provides more than one type of electronically supplied services (hereinafter, “ESS”), each type of ESS is to be indicated in a separate line.
• In order to confirm the data provided during registration as a VAT payer, within 180 calendar days from the registration date, the non-resident should send to the STSU's physical postal address (not its e-mail address) an official letter confirming the data provided during registration as a VAT payer, including identification number and information about the non-resident's representative.
• The STSU clarified that the application form should be submitted together with a document that confirms the authority of the non-resident's representative who will be subject to remote electronic identification, i.e. a power of attorney issued to such representative.
• In addition to the application form, information should be provided that confirms the fact and the period of achievement of the ESS supplies threshold set for mandatory registration (i.e. UAH 1 million). Therefore, mere indication of the supplies value in the application form is not sufficient, and an additional proof is required. We expect that the clarifications on the documents which might serve as such proof will be published in the nearest time.
• If the documents submitted together with the application form are made in a language other than English or Ukrainian, the STSU recommends providing their translation into English and / or Ukrainian.

Other important matters

When should a non-resident start charging VAT liabilities on ESS to its Ukrainian individual customers?

VAT liabilities can only be charged by a person registered as a VAT payer. Therefore, the non-resident should charge VAT liabilities on ESS starting from the date of its official registration as a VAT payer in Ukraine.

For example, the non-resident files its application for mandatory registration as a VAT payer on 28 February 2022. Entry in the register of VAT payers is made on 02 March 2022. The non-resident is considered registered as a VAT payer on 02 March 2022. In this case, VAT liabilities on ESS supplies to Ukrainian individuals must be charged starting from 02 March 2022 inclusively.

How to determine the first reporting period for submission of VAT return by a non-resident registered as a VAT payer?

Under the general rules, if an entity is registered as a VAT payer on the day other than the first day of a calendar period, the first reporting period will be the period, which starts on the date of such registration and ends on the last day of the first full reporting period (i.e. a calendar quarter in case of ESS).
For example, if the non-resident is registered as a VAT payer on 02 March 2022, the first reporting period will be 02 March 2022 – 30 June 2022. The non-resident must submit a quarterly VAT return within 40 days from the last calendar day of the reporting period (in this case – not later than 09 August 2022). VAT liabilities must be paid within 30 days after the deadline for submitting VAT return (in this case – not later than 08 September 2022).

What ESS supplies are subject to VAT and must be included by the non-resident in its VAT return?

Only those ESS supplies, which have been performed after the date of the non-resident’s registration as a VAT payer in Ukraine, should be included in the non-resident’s VAT return.

Tax authorities also clarified that ESS supplies carried out before the non-resident’s registration as a VAT payer are not subject to VAT and their amounts should not be shown in VAT return, even if payment for such services was made after the tax registration.

Should you have any questions regarding this Tax Alert, please contact our experts at Tax and Legal Department.

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