Ukraine – Introduction of VAT on electronic services

Starting from 1 January 2022 non-residents of Ukraine performing B2C supplies of electronic services to Ukrainian individuals (i.e. customers who are not legal entities or VAT-registered private entrepreneurs) will be required to register as VAT payers in Ukraine if the volume of services supplied to such customers in 2021 exceeded the registration threshold of UAH 1 mln (approx. EUR 30 thousand / USD 36 thousand). VAT-registered non-resident suppliers will be obliged to assess 20% VAT on the contractual value of electronic services.

Under Ukrainian legislation, VAT registration and compliance obligations are imposed on suppliers of electronic services or intermediaries (e.g. online marketplace) depending on aсtual contract arrangements.

At the same time, there is a temporary VAT exemption until January 1, 2023 for the supply of software products (including provision of access to online services, supply of updates, amendments, additions / extensions of the software, etc.).

If you are supplying services online to Ukrainian customers, I recommend that you analyse your supplies from the Ukrainian VAT standpoint in order to ensure full compliance with the law.

If you are interested in details, please contact one of the following person responsible at PwC Ukraine:

Maksym Dudnyk,
Director, Tax & Legal Services

Inna Andrushchenko,
Head of VAT practice

Bogdan Topolsky,
Manager, Indirect taxes

Yuliya Shyshko,
Manager, Indirect taces

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