Information note for non-residents, who supply electronic services to individuals, when the place of supply is located within customs territory of Ukraine

From January 1, 2022, VAT has been introduced for electronic services supplied by non-residents to individuals, including a natural person-entrepreneur who is not registered as a tax payer, when the place of supply is located within customs territory of Ukraine.

The list of VAT payers includes non-residents who do not have a permanent representative office and supply of electronic services to individuals, including an natural person-entrepreneur who is not registered as a VAT payer, when the place of supply is located within customs territory of Ukraine, including by providing access to electronic services through an electronic interface, providing technical, organizational, informational and other capabilities, which are carried out using information technologies and systems, to establish contacts and conclude agreements between sellers and buyers and/or supply such electronic services under intermediary agreements on its own behalf, but upon authorization of the electronic service provider.

Such list of on-residents does not include those who:

supply electronic services under intermediary agreements, if the invoices (receipts) provided to customers of electronic services specify the list of such electronic services and their actual supplier;

carry out exclusively processing of payments for electronic services and do not participate in the provision of such electronic services;

supply electronic services directly through permanent representative office in Ukraine.

A non-resident is obliged to register as a VAT payer if according to the results of previous calendar year the total amount of electronic services supplied to individuals, when the place of supply is located within customs territory of Ukraine, exceeds the equivalent of 1,000,000 UAH, which is calculated at the official exchange rate of Ukrainian currency to foreign currency set by National Bank of Ukraine effective on 0 o’clock on January 1 of appropriate year.

A non-resident may apply for registration as a VAT payer if according to the results of previous calendar year the total amount of supplied electronic services have not reached the equivalent of 1,000,000 UAH.

Registration of a non-resident as a VAT payer is carried out on the basis of application for registration, both voluntarily and mandatory.

Taking into account the suspension of the deadlines defined in Law № 2118-IX, non-residents who were obliged to register as a VAT payer but did not submit an application for registration by March 31, 2022, are released from the responsibility set in the Tax Code of Ukraine.

Consequently, non-residents who supply electronic services to individuals, when the place of supply is located within customs territory of Ukraine and whose total amount exceeded the equivalent of 1,000,000 UAH (mandatory registration) or not (voluntary registration), must comply with the requirements of the Tax Code of Ukraine on the taxation of electronic services supply.