Registration of non-residents as taxpayers
In accordance with the requirements of clause 64.5 of Art. 64 and Art. 133 of the Tax Code of Ukraine (hereinafter – the Code), non-residents are obliged to register with the regulatory authorities if they (with the assignment of 9 significant numbers):
- carry out activities in Ukraine through separate divisions;
- purchase real estate or obtain property rights to such property in Ukraine;
- open accounts in banks of Ukraine;
- carry out business activities in Ukraine through permanent representative offices;
- acquire the right of ownership of the investment asset defined in paragraphs three to six of paragraphs “e” of para. 141.4.1 clause 141.4 of Art. 141 of the Code, to another non-resident who does not have a permanent representation in Ukraine.
In the last two cases, a non-resident is registered as an income tax payer.
We remind you that non-residents are payers of income tax in the case of conducting business activities on the territory of Ukraine through a permanent representative office (which can be either a separate unit of a non-resident or meet the characteristics specified in clause 14.1.193 clause 14.1 of article 14 of the Code).
Inspections of the activities of non-residents in Ukraine
Checks on non-residents (foreign companies, organizations) who carry out economic activities on the territory of Ukraine and who had to be registered in accordance with the procedure established by Clause 64.5 of Art. 64 of the Code, but which did not fulfill the described requirements for registration within three months from the entry into force of the changes, and with respect to their separate divisions (including permanent representative offices) that are registered, may be appointed from July 1, 2021.
The basis for carrying out an unscheduled inspection is para. 78.1.22 clause 78.1 of Art. 78 of the Code – obtaining information indicating that a non-resident is conducting economic activity through a permanent representative office on the territory of Ukraine, in accordance with the requirements of paragraphs 14.1.193 clause 14.1 of Art. 14 of the Code, without being included in the tax records.
The moratorium on this type of inspections is valid from 03/18/2021 until the termination or cancellation of martial law (clause 522 and clause 69.2 of article 69 of subsection 10 of chapter XX “Transitional provisions” of the Code).
Responsibility
In the event that it is established that a non-resident is carrying out activities without being included in the tax records, the controlling body draws up an inspection report.
On the basis of such an act, it may be:
- a decision was made to register such a non-resident in Ukraine without the non-resident’s application and receipt of an objection to the verification act (clause 64.5 of article 64 of the Code);
– fines in the amount of UAH 100,000 were applied (clause 117.4 of article 117 of the Code);
- the property of a non-resident is seized (clause 94.2.9, clause 94.2 of Article 94 of the Code), the administrative seizure of property is terminated after the non-resident is registered for tax purposes on the basis of an inspection report (clause 94.19.10, clause 97.19 of the Code 94 of the Code).
However, there is a moratorium on the application of fines in accordance with the requirements of Clause 521 of Subsection 10 of Chapter XX “Transitional Provisions” of the Code.
At the same time, a non-resident who started economic activity through his permanent representative office before registration with the supervisory authority is considered to be evading taxation, namely income tax.
Therefore, all profits received by him are considered hidden from taxation (clause 133.3 of article 133 of the Code).
