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Representative offices of foreign companies need to register as tax payers in Ukraine

«On January 1, 2021, the Law of Ukraine of “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Ensuring the Collection of Data and Information Necessary for Declaring Certain Objects of Taxation” dated December 17, 2020 № 1117 (hereinafter – Law № 1117) entered into force.

Law No. 1117, amended paragraph 60 of subsection 10 of section XX of the Tax Code of Ukraine (hereinafter – the Code), according to which foreign companies with a representative office in Ukraine, registered at the Ministry of Economy shall submit to the tax authorities the documents for their registration (as foreign company) in accordance with the procedure established by paragraph 64.5 of Article 64 of the Tax Code.

Under Order # 62, foreign companies are required to register with the tax authority by 19.05.2021.

If the tax authority uncovers that a foreign company is conducting business in Ukraine through a representative office without registration, the authority may appoint an audit for the further inspection of such business activities.

According to the current legislation, such audits are possible starting from 1st of July 2021.

Clause 117.4 of Article 117 of the Tax Code states that a foreign company which carries out its activity through a Representative Office without being registered for tax purposes as provided for by Tax Code, shall be fined UAH 100,000.

The current established procedure for the necessary registrations is unclear. Furthermore, it appears that the registration would apply only to representative offices that have commercial activity, i.e. sales activity. Although unclear, nevertheless, the requirement exists and currently it seems the registration should be completed on time to completely minimize any risk of penalties. Contact Leinonen Ukraine for further information and help with the registration process.


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