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Ukraine electronic services VAT: Is your business compliant?

If you supply electronic services, such as streaming, online magazines or gaming, to customers in Ukraine, you are now required to pay VAT.

As of 1 January 2022, nonresident suppliers of electronic services must register for VAT. The threshold for registration is UAH 1 million annually. Any provider of digital services that exceeds that threshold must charge VAT on supplies.

What is a digital service?

Ukraine’s digital services VAT regulations contain a list of electronic services that are subject to VAT. However, it is important to recognise the list is not exhaustive. If you supply services online, chat to a VAT specialist if you are unsure of your VAT obligations. 

The list of electronic services includes cloud computing, virtual teaching (under certain conditions), software services and online advertising. 

There are also a number of exceptions. For example, providing consulting services by email is not subject to VAT.

Global VAT, local compliance questions 

Ukraine has joined a growing number of countries that have introduced VAT on electronic services. If you supply digital services to a global customer base, it’s therefore likely that you have global VAT obligations. 

Importantly, each country has its own threshold for VAT registration. In some cases, you may even be required to register for VAT from the first cent of supply.  

Centralised VAT compliance in Ukraine and beyond 

The basic principles are similar, but each country has its own definitions of ‘electronic services’. Complying with local VAT obligations also involves following specific processes, in a local language. 

For startups and independent businesses, managing VAT at scale is a challenge. You need a team of global VAT experts that can solve all your digital services VAT and e-commerce compliance issues, seamlessly and simply. 

 

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