Ukraine adopts a 20% VAT on online services of foreign companies



On June 3, 2021, the Ukrainian parliament,  the Verkhovna Rada adopted a bill imposing VAT on digital services delivered by non-resident companies. That means that foreign companies, such as Facebook, Netflix, Steam, Apple or Amazon will have to pay a 20% tax on their online services used by local residents after the draft law is signed and published.


According to the new rules, electronic services that non-resident companies supply to individuals in Ukraine are subject to VAT (20%).


However, the “tax on foreign advertising” rule is excluded from the code. That means that Ukrainian legal entities and individual entrepreneurs will not have to pay a 20% tax when buying electronic services from foreign companies.

What types of services will be considered electronic?


  • Downloading movies, books, magazines;
  • access to the databases;
  • access to the television channels;
  • access to the electronic resources;
  • distance learning services;
  • cloud services;
  • software delivery;
  • providing advertising services on the internet.


What types of services will not be considered electronic?


  • Car rental services;
  • products delivery services;
  • passenger transport services;
  • distance learning services between teacher and student;
  • providing consulting services via email;
  • internet access services.


Source: The website of  Verkhovna Rada of Ukraine 



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