- If an individual entrepreneur (non-VAT payer) purchases e-services from a non-VAT payer company, the entrepreneur is required to charge VAT on the services, regardless of the reason for the company not being registered as a VAT payer.
- The rules for taxing VAT on operations with the supply of electronic services to non-resident individuals (including individual entrepreneurs) on the customs territory of Ukraine are established in articles 208 and 208-1 of the Tax Code of Ukraine.
- The rules of article 208 of the Tax Code do not apply in the case of the supply of electronic services by a non-resident individual who is registered as a taxpayer according to paragraph 208-1.2 of the Tax Code, to an individual entrepreneur who is not registered as a taxpayer.
- VAT taxation rules for electronic services supplied to individuals, including individual entrepreneurs, who are not registered as VAT payers, by a non-resident individual registered as a VAT payer are established in article 208-1 of the Tax Code.
- If services provided to an individual entrepreneur by a non-resident individual are classified as electronic services and the place of supply is on the customs territory of Ukraine, then VAT is applicable, depending on the status of the entrepreneur (registered or not registered as a VAT payer).
- Therefore, if an individual entrepreneur (non-VAT payer) purchases an electronic service from a foreign company that is not registered as a VAT payer, with the place of supply on the customs territory of Ukraine, the entrepreneur is obligated to charge and pay VAT on the transaction according to article 208 of the Tax Code.
- Failure of a non-resident individual to register as a VAT payer when conducting operations with the supply of electronic services to individuals on the customs territory of Ukraine may result in a penalty imposed on the non-resident individual.
Source: news.dtkt.ua
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
