Business news from Ukraine

Business news from Ukraine

PRESIDENT OF UKRAINE SIGNS LAW ON TAXATION OF ELECTRONIC SERVICES OF NON-RESIDENTS

President of Ukraine Volodymyr Zelensky signed the law On Amendments to the Tax Code of Ukraine regarding the abolition of taxation of income received by non-residents in the form of payments for the production and/or distribution of advertising, and improvement of the taxation procedure for value added tax transactions for the supply of electronic services by non-residents to individuals No. 1525-IX, which the Verkhovna Rada adopted on June 3. The website of the head of state reports that the document defines a special taxation procedure for value added tax of non-resident companies that provide electronic services to persons residing in Ukraine.
“This will allow increasing state budget revenues from VAT. Such taxation rules are already becoming a common practice in foreign countries, for example, in the countries of the European Union, Australia, Belarus, Kazakhstan, and the like,” it said.
It is reported that foreign companies that supply electronic services to Ukrainians will be required to register as value-added tax payers using a simplified procedure through a special electronic service if the total amount from the implementation of the relevant transactions exceeds UAH 1 million per year. Non-residents will fill out simplified statements in electronic form in the state or English language.
At the same time, according to the document, transactions for the supply of distance learning services via the Internet are exempted from VAT if this network is used exclusively as a means of communication between a teacher and a student. Also, transactions on the supply of educational services by access to public educational, scientific and information resources on the Internet from the branches of knowledge and specialties in which the training of applicants for higher education is carried out are exempted from value added tax, if their implementation and provision does not require human participation.
From January 1, 2022, Ukrainian companies which pay for services for the production or distribution of advertising abroad, will be exempted from VAT.

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PORTFOLIO OF GOVERNMENT DOMESTIC LOAN BONDS HELD BY NON-RESIDENTS REACHES HISTORICAL RECORD OF UAH 60.12 BLN

The portfolio of government domestic loan bonds held by non-residents as of July 4 reached a new historical record high of UAH 60.12 billion at face value, including an increase of UAH 2.71 billion following the results of primary auctions conducted on July 2.
According to data released by the National Bank, the entire increase was traditionally provided by hryvnia securities, by UAH 3.91 billion, which total UAH 58.21 billion in the portfolio held by non-residents.
Such an inflow of funds from non-residents allowed the National Bank to buy out $52 million in the market after primary auctions on July 3, although the hryvnia exchange rate strengthened and for the first time since April 2018 it overcame the level of UAH 26/$1.
A week earlier, the portfolio of government bonds owned by non-residents grew by UAH 4.79 billion, but then a small part of it (UAH 390 million) was secured by equities in U.S. dollars.
In general, since the beginning of 2019 the portfolio of government bonds owned by non-residents has increased by UAH 53.77 billion, or 9.5 times.

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