Non-residents are already registering as income taxpayers
As of today, some non-residents have already registered at the tax authorities and are registered as corporate income taxpayers according to requirements of the current law.
Here are topical questions and answers regarding registration of non-residents as corporate income taxpayers and their taxation.
| Question | Answer |
| Will there be problems with application of provisions of the Tax Code of Ukraine, which consider permanent establishment as a separate corporate income taxpayer, in connection with cancellation of the relevant registration for the permanent establishment? | No There are no problems with registration. Foreign companies are already registered as income taxpayers. For income taxpayer’s accounting and registration, a foreign company submits to the supervisory authority an application form 1-OPP (indicating the registration grounds). Such application shall be accompanied by documents, the list of which is defined in Paragraph 64.5 Article 64 of the Code. All foreign companies registering at the supervisory authorities are provided with a tax number, which is a registration (accounting) 9 is significant number. Foreign company receives registration certificate in 34-OPP form. Additional questions regarding registration of foreign companies are set out in the Newsletter №19. Territorial bodies (Taxpayer Service Centers) are informed and accept documents |
| How to follow the new rules in absence of a new procedure for registration of non-residents as corporate income taxpayers? | Order of the Ministry of Finance of Ukraine as of 08.02.2021 № 62 “On approval of amendments to the Procedure for tax and fees payers accounting” for the state registration at the Ministry of Justice. At the same time, the Code explicitly defines grounds and list of documents submitted for registration. Therefore, prior to the entry into force of amendments, the provisions of Paragraph 64.5 Article 64 of the Code and the Procedure for tax and fees payers accounting in the part that does not contradict the Code should be followed. |
| Should non-residents whose activities do not create a permanent establishment in Ukraine register as corporate income taxpayers? | No
|
| Will a non-resident, as a new corporate income taxpayer, be considered the successor of its permanent establishment in respect of tax assets and liabilities formed in previous reporting periods? | Yes
|
| Does deregistration of a permanent establishment as a corporate income taxpayer and the corresponding registration of relevant non-resident lead to a tax audit of such representative office and / or non-resident? | No |
| Should a non-resident, registered as a corporate income taxpayer, prepare separate financial reporting for the purposes of this tax in addition to the financial reporting of its permanent establishment? |
No |
| If a non-resident’s permanent establishment submitted quarterly corporate income tax declarations in 2020, should such non-resident continue to submit quarterly reports in 2021 if the annual income of permanent establishment in 2020 exceeds 40 million UAH? |
Yes |
In case of questions from non-residents, their permanent establishments can apply to the State Tax Inspection (Taxpayer Service Center) at their registration place, where they will be provided with qualified assistance to submit documents and register such non-residents as corporate income taxpayers. Addresses and contacts can be found on the official web portal of the State Tax Service https://tax.gov.ua in banner “Service Centers” or in the open part of the Electronic Cabinet in section “Press Center’, “Contacts” (https://cabinet.tax .gov.ua / contacts).
Reference.
Concept of registration at the tax authorities and registration of non-resident enterprises as corporate income taxpayers was developed in 2018 – 2019 by a working group at the Ministry of Finance of Ukraine on the implementation of Plan to Combat Tax Erosion and Withdrawal of Profits from Taxation, which included specialists from the Project Office of Reforms at the Ministry of Finance, the NBU and a wide range of experts – representatives of audit companies. Further, the project was evaluated by the Organization for Economic Cooperation and Development. Purpose of the specified concept was to clearly delineate the powers and responsibilities of non-residents to pay taxes in Ukraine.
Concept was implemented by amending the Tax Code of Ukraine by the Law of Ukraine of 16.01.2020 №466 “On amendments to the Tax Code of Ukraine to improve tax administration, eliminate technical and logical inconsistencies in tax legislation”, the Law of Ukraine as of 14.07.2020 №786 “On amendments to the Tax code of Ukraine on functioning of the Electronic Cabinet and simplification of work of individuals – entrepreneurs” and the Law of Ukraine as of 17.12.2020 №1117 “On amendments to the Tax Code of Ukraine and other laws of Ukraine to ensure the collection of data and information required for declaration of certain taxation objects”.
