Non-residents: registration, tax accounting and activity on the territory of Ukraine

According to requirements of Paragraph 64.5 Article 64 and Article 133 of the Tax Code of Ukraine (hereinafter - Code) non-residents are obliged to register at the controlling bodies if they:

- carry out activities in Ukraine through separate divisions, including permanent representative offices;

- purchase real estate or obtain property rights to such property in Ukraine;

- open accounts in Ukrainian banks;

- acquire the ownership right of the investment asset, specified in Clauses 3 - 6 of Sub-paragraph "e" of Sub-paragraph 141.4.1 Paragraph 141.4 Article 141 of the Code, to another non-resident who does not have a permanent representation in Ukraine.

Paragraph 60 Sub-section 10 Section XX "Transitional Provisions" of the Code establishes that non-residents (foreign companies, organizations) that carry out economic activities on the territory of Ukraine and/or that have properly accredited (registered, legalized) separate subdivisions, including permanent representative offices on the territory of Ukraine and as of on January 1, 2021 they are not registered at the controlling bodies are obliged to submit documents to the controlling bodies for their registration according to procedure established by Paragraph 64.5 Article 64 of the Code.

That is, the income tax payer from April 1, 2021 is determined directly by non-resident who carries out activities through a permanent establishment (the income tax payer was determined by a permanent establishment before January 1, 2021).

Non-residents were also required to register at the controlling bodies (without registering as the income tax payer) if they:

- carry out activities in Ukraine through separate divisions;

- purchase real estate or obtain property rights to such property in Ukraine;

- open accounts in Ukrainian banks.

It should be noted that separate units of non-residents, including permanent representative offices, which are accredited (registered, legalized) in Ukraine, continue to be registered as payers of relevant taxes (newly created separate units are subject to registration by payers of relevant taxes) according to the number from the Unified State Register of Enterprises and Organizations of Ukraine.

As of December 1, 2022, on accounting from among non-residents who carry out activities on the territory of Ukraine through separate divisions, including permanent representative offices, and who were subject to Paragraph 60 Sub-section 10 Section XX "Transitional Provisions" of the Code, the following non-residents are registered in the controlling bodies:

395 non-residents, who carry out activities through permanent representative offices;

161 non-residents, who carry out activities through separate units that are not a permanent establishment.

Number of non-residents who have not complied with requirements of Paragraph 60 Sub-section 10 Section XX "Transitional Provisions" of the Code is about 82 and 86 percent, respectively.

Therefore, we draw attention to the need for non-residents to comply with norms of Paragraph 60 Sub-section 10 Section ХХ "Transitional Provisions" of the Code regarding submission of documents to tax authorities for their registration, including as the income tax payers.

Registration of non-residents, registration as the income tax payers, as well as payment of income tax by them are covered in more detail in the Newsletters № 19 and № 20 of the State Tax Service.