17 February 2021, Wednesday, 19:12 216

Rada To Introduce VAT Payment For Facebook, Netflix And Google

Editor: Daria Zubkova

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The Verkhovna Rada intends to introduce VAT payments for Facebook, Netflix and Google.

286 MPs voted for the adoption in the first reading of the bill No. 4184, with the minimum required 226, Ukrainian News Agency reports.

The bill proposes to supplement the Tax Code with norms on the abolition of taxation of income received by non-residents in the form of payments for the production and/or distribution of advertising and norms regarding the improvement of the taxation procedure of value added tax on transactions for the supply of electronic services by non-residents to individuals.

In particular, the document proposes:

- exclude the norm according to which residents, when paying income to non-residents for the production and/or distribution of advertising, must pay tax at the rate of 20% of the amount of such payments at their own expense;

- clearly define that for documents certifying the fact of the delivery of services drawn up in electronic form, the date of execution of such a document is the date of drawing up such an electronic document;
- determine the list of electronic services;
- to exempt the supply of electronic services from value added tax by providing access to electronic educational (training) resources as part of the provision of educational services;
- include non-residents in the list of persons who are registered as payers of value added tax;
- to establish the rules for determining the place of supply of electronic services (B2C);
- establish the form and determine the procedure for sending a tax notification to a non-resident and a complaint about such a decision;
- to define a simplified procedure of registration of a VAT payer for non-resident suppliers, which can be carried out remotely in electronic form on a specially developed web portal;
- to define the rules of tax accounting for value added tax for non-residents providing electronic services to individuals, the place of delivery of which is located in the customs territory of Ukraine;
- exemption from the obligation of a non-resident to register tax invoices;
- to provide for the payment of the tax liability for a non-resident in foreign currency.
One of the authors of the document, MP Danylo Hetmantsev (Servant of the People), previously said that e-commerce services should already be taxable by law, but this is not happening due to the fact that it is almost impossible to administer this activity.
According to him, the situation that has developed now, when Ukrainian advertisers who work in the country must pay tax, and large transnational giants are actually exempt from VAT, is absolutely wrong, and this must be eliminated.
Besides, Hetmantsev noted that a meeting had already taken place with officials from Facebook and other large companies who did not object to paying VAT.
As Ukrainian News Agency earlier reported, the Verkhovna Rada intends to introduce liability for value added tax fraud in the Criminal Code of Ukraine as a separate type of criminal offense, the investigation of which is within the competence of the Bureau of Economic Security.