Digital tax in Ukraine

2021

Amazon and eBay raise tariffs for Ukrainians after digital tax

At the end of December 2021 eBay Amazon , they announced an increase in tariffs for Ukrainian users in connection with the entry into force of the so-called "tax on." Google

From January 1, 2022, each purchase through the eBay and Amazon platforms for residents of Ukraine will cost 20% more than before. In addition, non-profit users need to specify a tax registration number in their Seller Central account. To do this, in the settings of the section "Tax information" you need to select "Ukraine" in the list of countries and specify your tax number.

Amazon and eBay raised tariffs for Ukrainians after the introduction of a digital tax

The letter that eBay sent out to users says that due to a change in tax regulation, the company adds VAT to the cost of its services, this rate will be applied to each payment for the service carried out by Ukrainian users.

eBay charges two types of basic fees when selling goods of most categories: insertion feels (when placing ads) and final value feels (when selling goods).

Amazon noted that the innovation will not affect commodity listings and users will not need to change anything.

In December 2021, Google warned Ukrainians of an increase in the cost of services from January 2022. The price will increase for all Ukrainian users and even individuals-entrepreneurs. But legal entities can avoid a promotion if they are registered according to all the rules and use Workspace. The social network Facebook also reported a 20% tax for its services.

The purpose of the digital tax in Ukraine is to increase revenues to the state budget from VAT. So, foreign companies that supply Ukrainians with electronic services should be registered by value added tax payers according to a simplified procedure through a special electronic service.^[1]

Ukraine introduces VAT payment for Internet giants

In early June 2021, the Verkhovna Rada passed a bill that would oblige Facebook, Netflix, Google and other Internet giants to pay VAT in Ukraine. This initiative was supported by 283 deputies with 226 necessary.

The law supplements the Tax Code of Ukraine with the norms on "improving the procedure for taxing value added tax on transactions for the supply of electronic services by non-residents to individuals." Electronic services that non-resident companies supply to individuals in Ukraine will now be subject to 20% VAT. For this, non-resident companies are included in the list of tax payers in Ukraine.

Ukraine introduces a "tax on Google"

The establishment of special rules for taxing VAT of electronic services is becoming common in foreign countries, for example, in the countries of the European Union, in Australia, Belarus, Kazakhstan, Russia, the explanatory note to the bill says.

It also says that thanks to the bill it is planned to replenish the state budget and ensure the principle of equality of all taxpayers.

The main provisions of the law are as follows:

• For documents certifying the delivery of services made in electronic form, the date of issuance of such a document is considered the date of preparation of such an electronic document;
• exempt from taxation on value added tax on the supply of electronic services by providing access to electronic educational (educational) resources as part of the provision of educational services;
• non-residents are included in the list of persons who are registered by value added tax payers;
• Rules for determining the place of delivery of electronic services (B2C) have been established;
• a simplified procedure for registering the VAT payer for non-resident suppliers has been established, which can be carried out remotely in electronic form on a specially developed web portal.^[2]

Notes