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Ukraine Amends VAT Registration Regulations for Non-Resident Suppliers of Electronic Services — Orbitax Tax News & Alerts

The Ukraine Ministry of Finance has issued Order No. 637 of 7 December 2021, which was registered by the Ukraine Ministry of Justice on 23 December 2021. The order amends the regulations of registration for VAT payers (Order No. 1130 of 14 November 2014).

The main amendments are for the implementation of new registration requirements for non-resident suppliers of electronic services and advertising from 2022, including a new section that defines the procedures for registration, re-registration, and cancellation of registration of non-residents as VAT payers. The provisions of the new section apply for non-residents without a permanent establishment in Ukraine that supply electronic services to individuals, including individual entrepreneurs not registered for VAT (B2C supplies). As previously reported, the requirements to register for and collect VAT were introduced by Law No. 1525-IX of 3 June 2021, which provided new rules for the collection of VAT at the standard rate of 20% on electronic services provided by non-residents.

Among other things, the new section in the registration regulations provides that non-residents subject to the new rules are required to register by 31 March if their supplies in Ukraine exceed UAH 1 million in the previous calendar year. It is also provided that if a non-resident has not exceeded the threshold but deems it appropriate to voluntarily register, they may do so at least 10 calendar days before the beginning of the reporting (tax) period from which such non-resident will be considered a VAT payer. For this purpose, the new section specifies the requirement for the application of registration, with a new specific application form for non-residents attached as an annex. It is also provided that changes must be reported within 10 calendar days, with a specific re-registration form attached for this purpose as well. Rules are also established for the cancelation of registration, with a specific form attached. Lastly, the order sets out the different codes to be used for different electronic service supplies.

The amendments to the VAT registration regulations generally apply from 1 January 2022. Click the following links for Order No. 637 and Order No. 1130 as amended.