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The “Google tax” bill passed the first reading in the Parliament

18 February, 2021 Newsletters

The bill No. 4184 as of 02.10.2020 introducing a 20% VAT tax on digital services supplied to individuals located in Ukraine by non-resident businesses (so-called “Google tax”) passed the first reading in the Ukrainian Parliament.

If the bill passes the second reading and is signed into law by the President of Ukraine, non-resident businesses supplying digital services to Ukraine-based individuals will be liable to register as VAT payers and remit VAT to the budget of Ukraine starting from 2022 provided such businesses reach the annual volume of digital services of UAH 1,000,000. The detailed review of the taxation rules and affected suppliers you may find in our article “Ukraine postpones the VAT taxation of foreign digital businesses until 2022”.

Apart from introducing the “Google tax”, the bill No. 4184 also proposes to remove paragraph 141.4.6 of article 141 of the Tax Code of Ukraine which establishes a controversial tax on foreign advertising. This means that Ukrainian businesses will no longer have to pay a 20% tax when purchasing advertising services from foreign providers.

The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.

Kind regards,

© WTS Consulting LLC, 2021

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