The Verkhovna Rada adopted in the second reading bill #4184, which obliged Internet giants to pay taxes in Ukraine. 283 lawmakers voted for the bill.
The online broadcast of the session can be viewed HERE.
The document proposes to add to the Tax Code of Ukraine the norms on abolition of taxation of income received by nonresidents in the form of payment for production and/or distribution of advertising, and norms on improvement of value added tax of operations on supply of electronic services by non-residents to natural persons.
According to the draft law prepared for the second reading, the taxpayer will be a foreign company that provides electronic services on the Internet, or its representative office in Ukraine.
Electronic services will be provided exclusively to individuals. If the recipient of the services is a company, then it will be a taxpayer.
The recipient of electronic services will be identified by:
- location of the provider;
- mobile country code of the SIM card;
- IP address;
- billing address;
- bank details.
What is e-services?
Electronic services, according to the document, include:
- downloading films, books, magazines;
- access to databases;
- access to television channels;
- access to electronic resources;
- remote learning services;
- cloud services;
- software delivery;
- provision of advertising services on the Internet.
These will not include car rental services; catering establishments for the supply of products; passenger transport; remote learning between teacher and student; providing consulting services by e-mail; provision of Internet access services.
In addition, educational e-services provided by Ukrainian companies, educational institutions and educational portals will be exempt from tax.
How will taxpayer and the controlling body communicate?
The document states that a special electronic service will be created for foreigners, in which all communications with the tax authorities will be carried out. Such communications will have to be carried out remotely.
The tax will be paid in dollars or euros (at choice).
All forms will be approved in two languages: Ukrainian and English.
The document also cancels the advertising tax for production or distribution.
Earlier, the Verkhovna Rada supported in the first reading bill #4184, which is aimed to oblige Internet giants to pay taxes in Ukraine.