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?
What types of services will not be considered electronic?