IT Ukraine discussed taxation issues with Danylo Hetmantsev

IT Ukraine discussed taxation issues with Danylo Hetmantsev

The IT Ukraine Association jointly with business representatives discussed a number of topical for the industry issues on taxation with Danylo Hetmantsev, Head of the Committee on finance, tax and customs policy of the Verkhovna Rada of Ukraine, and representatives of the State Tax Service of Ukraine. The round-table discussion was organised by Crowe Mikhailenko and Expertus in partnership with the IT Ukraine Association.

The focus of the discussion was on the issues of the biggest concern of the IT community representatives and which the IT Ukraine Association constantly works on:

  •       VAT Payment on the software product supply

Danylo Hetmantsev noted that operations for the supply of software products should be equated to services instead of to goods. Additionally, he emphasised the importance of certainty and unity of position on this issue for business.

According to representatives of the State Tax Service of Ukraine, a package of general tax advice on these issues has been prepared and has already been sent to the Ministry of Finance of Ukraine for approval and further publication.

Remind you that as of January 1, 2023, the exemption from VAT for software supply services ceased to apply.  The IT Ukraine Association proposes to return the benefit for the period of martial law in Ukraine and has already sent a request to the Committee of the Verkhovna Rada of Ukraine on Finance, Tax and Customs Policy, the Office of the President of Ukraine, the Ministry of Finance of Ukraine and the Minister of Digital Transformation of Ukraine.

  •       Sole Trader’s Activities

There is currently no prospect of resolving the situation with sole traders in the industry.  According to Hetmantsev, reforming legislation in this area, despite agreements with the IMF, is not the one to be planned in the near future, and coming back to this topic is possible only after the end of the War.

  •       Taxation of residents who are abroad

The position of Danylo Hetmantsev is as follows: if individuals carry out entrepreneurial activities and receive remuneration on foreign accounts, then it should be taxed as received as a result of entrepreneurial activities in Ukraine, regardless of which accounts (Ukrainian or foreign) such payments are made to.

  •       CFC taxation

Regarding the improvement of taxation of controlled foreign companies, Danylo Hetmantsev assured that this week the Bill No. 8137 will be under consideration of the specialised

Committee of the Verkhovna Rada with a recommendation for adoption, because, according to the Member of the Parliament, it improves business operations. 

  •       Tax invoice blocking

According to Danylo Hetmantsev, currently the main problem for business is the blocking of tax invoices.  He stated that there is a positive trend for business, since in March the number of blocked invoices was 0.79% of the total, in April - 0.69%, and there are plans to reduce this percentage to 0.3% by the end of this year.