On February 11, 2021, Tax Authorities of Ukraine published on their informational resources an Information Letter № 19 “On taxation of non-residents and their permanent representative offices in 2020 and their registration as taxpayers starting from 01st of January 2021.”
This information letter contains some clarifications about the obligations of non-residents tax registration (foreign companies and/or organizations), which are not registered in regulatory authorities, and are carrying out economic activities on the territory of Ukraine and/or have properly registered (credited, legalized) separate divisions, including permanent representative offices on the territory of Ukraine of, as of 1st of January 2021.
Tax authorities note that non-residents are required to submit documents to the regulatory authorities to be registered as income taxpayers, by the end of March 2021. From the date a foreign company (organization) is registered as a payer of income tax, its representative office is automatically removed from the register of income taxpayer, but continues to be as a payer of other obligatory types of taxes.
Liability for violation of this obligation is established in Article 171 of the Tax Code of Ukraine. The penalty amounts to UAH 100,000. (About 3,000 euros).
To be registered non-resident must submit an application and copies of the following documents (the originals must also be represented when submitting):
• an extract from the business register (the trade, bank, court register, or any other register which records the fact of a company (organization) appropriate registration) issued in the country of registration of a foreign company (organization), notarized and legalized in a prescribed manner, with notarized translation into Ukrainian ;;
• a document confirming the assignment of an identification (registration, account) number (code) of a non-resident in the country of registration, in case of the extract from the relevant business register does not contain information about this number (code), with a notarized translation into Ukrainian;
• a document that confirming the authorities of a non-resident’s representative. In case this document is issued in the country of registration of a non-resident, it must be duly legalized with a notarized translation into Ukrainian;
• in case a non-resident carries out activities in Ukraine through a separate division, accreditation (registration, legalization) document of a separate division of a foreign company, an organization on the territory of Ukraine, (Registration Certificate of the representative office).
The inspections of non-residents (foreign companies, organizations) that are carrying out the economic activities on the territory of Ukraine and who must be registered in the tax authorities, but who failed to fulfill the requirements for registration by the end of March 2021 (31st of March, 2021), and their registered separate divisions (including permanent representative offices), could be appointed starting from the 1st of July 2021.
In the information letter Tax authorities focuses the attention on permanent representative offices, the criteria for determining which were updated in the legislation and entered into force on May 23rd, 2020, (we informed you about these changes earlier). However, there is a position of lawyers on the necessity of registration of non-residents, who are represented in Ukraine through the so-called “non-commercial” or “non-permanent” representative offices. Experts express their judgments that non-residents acting through permanent establishments should be registered and registered as an income taxpayer and non-residents acting through “non-permanent” representative offices should simply be registered in the tax authorities. This position was also orally supported by representatives of Kyiv tax authorities during our telephone call.
If you need support on this issue as well as support for the registration of a non-resident, our team is ready to provide you with all necessary support.