Ukraine: Mandatory registration of non-residents with the tax authorities by 31 March 2021


In brief

Foreign entities operating in the territory of Ukraine, including those who already have a representative office in Ukraine, must register with the tax authorities by 31 March 2021.

Key takeaways

According to Law of Ukraine No. 1117-IX of 17 December 2020, foreign entities operating in Ukraine, regardless of whether they have a registered representative office or a permanent establishment in Ukraine, have to register with the tax authorities directly by 31 March 2021.

The existing representative offices, including permanent establishments, will continue to be separately registered for tax — other than Corporate Income Tax — purposes.

In more detail

On 23 May 2020, Law of Ukraine No. 466-IX ("Anti-BEPS Law") became effective with certain provisions being phased out.

At the same time, certain provisions of the Anti-BEPS Law called for the extension of their entry into force or elaboration thereof.
To this end, on 17 December 2020, the Parliament of Ukraine adopted Law of Ukraine No. 1117-IX ("Amending Law"), which entered into force on 1 January 2021.

With the Amending Law being largely aimed at extending the entry into force or elaboration of the Anti-BEPS Law provisions, it, inter alia, extends the deadlines for non-residents to register with the tax authorities.

More specifically, foreign entity (non-resident) operating in Ukraine, including through a representative office, must register in Ukraine as a Corporate Income Tax ("CIT") payer, after which its representative office would cease to be a CIT payer in Ukraine. It would, however, continue as taxpayer/tax agent for Personal Income Tax, Military Tax, Unified Social Contribution and VAT purposes.

The deadline for non-residents to register is 31 March 2021.

Please note that the Anti-BEPS Law significantly extended the tax office's rights with respect to identifying a permanent establishment, allocating profits and/or enforcing tax laws in this context. If the tax office were to establish that a non-resident is operating in Ukraine without a registered presence, it may — starting from 1 July 2021 — conduct a tax audit, register a non-resident as a taxpayer in Ukraine and assess back taxes and tax penalties.

Hennadiy Voytsitskyi

Roman Koren