Non-resident sellers and marketplaces liable to VAT obligations on e-services 2022
Ukraine is to impose on non-resident providers of digital services to its consumers the obligation to VAT register from 1 January 2022. There will be a VAT registration threshold of UAH 1million (approximately €35,000), with the option to voluntary register. Returns on a simplified basis will be quarterly.
The current Ukrainian VAT rate is 20%. The current repatriation tax on advertisement income will be withdrawn at the same time.
Electronic or digital services subject to VAT
The following supplies are liable to Value Added Tax in Ukraine. This is irrespective if provided by the internet on PC’s, tablets, smart TV, cars etc.
- Streaming or download media
- Broadcast TV etc
- E-books and electronic journals
- Cloud services
- Databases and search engines
- Advertising services
Online educational distance learning services will be exempted from VAT if live interaction between teacher and student(s). Whilst providers and facilitating marketplaces are included, certain intermediaries, including payment processors are excused from becoming deemed suppliers of the taxable services.
Determining VAT place of supply
Providers must track the following pieces of evidence to track if VAT is due in Ukraine:
- Phone or device SIM card country code
- IP address
- Payment address
VAT compliance rules
The following requirements are made of VAT registered business:
- There is a simplified VAT registration process for non-residents
- If the VAT registration threshold was passed in 2021, the provider should be VAT registered by 31 March 2022
- VAT invoices are not required
- They will electronically file quarterly simplified returns within 40 days of the end of the quarter.
- Returns may be in Ukrainian or English
- Any VAT due may be paid in USD or Euro if opted for at registration
Once registered, foreign providers will be listed on a public register. This will enable shoppers to check they are properly managing and VAT responsibilities.
Check our global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.
Europe VAT on digital services
|Country (click for details)||Rate||Date||Threshold||Comments|
|EU 27 member states||17% to 27%||Jan 2015||€10k EU residents; Nil for non-EU|
|Bosnia Herzegovina||17%||Jan 2023||BAM 50.000|
|Iceland||24%||Nov 2011||ISK 2 million|
|Norway||25%||Jul 2011||NOK 50,000|
|Russia||16.67%||Jan 2017||Nil||B2C & B2B|
|Switzerland||7.7%||Jan 2010||CHF 100,000 on global income|
|Ukraine||20%||Jan 2022||UAH 1m|