Tax rate by region Ukraine

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Understanding VAT for SaaS in Ukraine

Navigating SaaS sales tax in Ukraine requires a thorough understanding of the country’s unique Value-Added Tax (VAT) system. First established in 1992 and currently set at a standard 20.0%, understanding the VAT landscape and your subsequent compliance requirements will help you ensure smooth operations. Notably, Ukraine offers a 7.0% reduced VAT rate for specific categories, such as distance learning services delivered over the internet with human interaction. However, businesses must be vigilant with record-keeping as VAT-related documentation, including invoices, returns, transaction details, electronic records, and supporting documents, needs to be retained for a minimum of 5 years.

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Ukraine

Ukraine implemented a VAT system in 1992 to enhance revenue generation and modernize its tax framework.

Official government link: State Tax Service

20.00%

E-products and services VAT/Sales tax rate

7.00%

Reduced tax rate

Reduced tax rate product categories

No specific digital goods or services have reduced tax

Exempted product categories

Distance learning services provided over the Internet are exempt from VAT if they involve human participation or interaction between the teacher and students.

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Once the threshold has been exceeded

Online registration possible

Yes

Local representative needed

No

Registration procedure

To register as a taxpayer, an application must be submitted digitally through a special portal to the central executive body. Along with the application, an extract from the trade register and a tax certificate from the country of incorporation are required. The application should include registration details in the incorporation country, identification data of the non-resident, representative’s information, email address, reason for registration, information on exceeding the threshold, and the preferred foreign currency (euro or US dollar) for tax payments.

List of digital and electronic services liable for tax

Digital Copies and Access: Subscriptions to digital newspapers, magazines, and books; access to and downloads of photos, graphics, and videos.
Database Access: Use of search engines and directory services online.
Audiovisual Works: Access to digital copies of videos, audio education, games, and TV programs (excluding live broadcasts).
Digital Resources: Access to information, commercial, and entertainment resources on public platforms.
Distance Learning: Online courses that don’t require human participation, including virtual classrooms and automated grading.
Cloud Services: Provision of computing resources, storage, and digital communication systems using cloud technology.
Software: Supply and updates of software, including remote maintenance.
PR and Advertising: Online PR services and advertising space, including banner ads on websites.

Penalties

Non-residents supplying digital services in Ukraine without VAT registration can face additional VAT liabilities based on the amount of services supplied, and may be required to register as VAT payers. Unregistered non-residents can incur a tax penalty of 30 minimum wages (approximately EUR 6,000 as of 2021). If the VAT registration threshold of UAH 1 million was exceeded in 2021, registration should have been completed by March 31, 2022, with late registration potentially resulting in penalties. Quarterly VAT returns filed late by non-residents are subject to unspecified penalties, and late payment of VAT also incurs penalties. Overall, Ukraine imposes significant penalties for non-resident digital service providers who fail to register for VAT, register late, file returns late, or pay VAT late, including back-taxes, registration requirements, and substantial fines.

Registration threshold

UAH 1 million

Filing interval

Quarterly

Filing deadline

Within 40 days after the end of each quarter

E-invoicing requirements

Not mandatory, only B2G sales are mandatory

Record keeping

The following must be kept for at least 5 years: Invoices, VAT Returns, Transaction Records, Electronic Records and Supporting Documentation

How-To Guides: Ukraine SaaS VAT

Step: 1 Threshold

Effective January 1, 2022, Ukraine requires non-resident vendors (including online platforms) of digital services to consumers (B2C) in Ukraine to register for and collect VAT if their sales exceed UAH 1 million.

 

Registration is mandatory if this threshold is exceeded.

Step: 2 Business Registration

Non-resident digital service providers must register via the special “VAT for Non-Residents” portal provided by the State Tax Service (STS) of Ukraine.

Step: 3 Obtain TIN

Upon registration, you will be issued a 9-digit Tax Number for non-residents (e.g., 9xxxxxxxx).

Step: 1 Standard VAT Rate

Apply the standard VAT rate of 20%.

Step: 2 Determine if you need to register.

To calculate your tax amount, use the following formula:

 

VAT Amount = Net Price x 20%

Step: 3 Reverse Charge (B2B)

Yes. Supplies of digital services to VAT-registered Ukrainian business entities (B2B) are subject to the Reverse Charge Mechanism. The non-resident supplier does not charge VAT; the Ukrainian buyer calculates and pays the VAT locally.

Step: 1 Selling B2C

You must charge 20% VAT on all digital services sold to Ukrainian individual consumers (including sole proprietors not registered for VAT).

Step: 2 Selling B2B

• VAT-Registered Buyer: Do not charge VAT. The buyer is liable under the reverse charge.

• Non-VAT Registered Buyer: If the business customer is not registered for VAT (e.g., a small sole trader), you must treat the sale as B2C and charge 20% VAT.

Step: 3 Invoice Requirements

Non-residents under the special regime are not required to issue formal “Tax Invoices” registered in the Unified Register. A standard commercial receipt/invoice is sufficient and should include:

• Supplier Name & Tax Number
• Buyer Name
• Service Description
• Consideration (Price) & Currency
• Tax Amount

Step: 1 Filing Interval

File the Simplified VAT Declaration Quarterly.

Step: 2 Filing Deadline

The return must be submitted within 40 calendar days following the end of the reporting quarter (e.g., by May 10 for Q1).

Step: 3 Submission

Submit returns electronically via the Cabinet for Non-Residents on the STS portal. Payments must be made within 30 days after the filing deadline, in EUR or USD.

Step: 4 Record Keeping

Maintain records for at least 5 years to comply with the statute of limitations.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Ukraine’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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