The Main Department of the State Tax Service in Kyiv clarified key VAT rules for non-resident providers of digital services to consumers in Ukraine. The Department's announcement includes information on when registration is required, which documents must be submitted, and contact details of the relevant tax administration.

Key VAT Requirements for Digital Service Providers

In its announcement, the Department noted that Ukraine requires non-resident digital service providers to register for VAT once their annual sales to local consumers exceed the equivalent of UAH 1 million (approximately EUR 19,500). This threshold is calculated using the official UAH exchange rate set by the National Bank of Ukraine at the start of the relevant year.

Given that registration is based on the previous year's transaction volume, non-resident businesses that exceed the threshold must submit VAT registration form No. 1-RON by March 31 of the following year. Non-resident businesses that did not exceed the VAT registration threshold may still voluntarily register for VAT by submitting an application at least 10 calendar days before the start of the tax period from which the business wants its VAT registration to take effect.

In addition to submitting the required registration form, non-resident businesses must also submit supporting documents to Ukraine's State Tax Service via the dedicated online portal using electronic identification. The supporting documents required for completing the VAT registration process include a copy of an extract from the relevant business register and a document confirming the assignment of an identification number when such information is not available in the extract.

Key Takeaways

Non-resident digital service suppliers operating in Ukraine must develop mechanisms to determine whether their customers are located in this country and whether they have exceeded the VAT registration threshold. Importantly, non-resident businesses must take into account the official UAH exchange rate when calculating the threshold.