The difficult situation that has arisen in connection with the COVID-19 pandemic and the introduction of quarantine measures poses complex challenges for business, which are primarily related to the calculation and payment of taxes.
In this regard, our legislators have repeatedly made changes to the Tax Code of Ukraine regarding the improvement of tax administration, elimination of technical and logical discrepancies in tax legislation. So, the next changes bring even more responsibilities to the business.
The first paragraph of clause 60 of subsection 10 of section XX of the Tax Code of Ukraine established that non-residents (foreign companies, organizations) carrying out economic activities in Ukraine and / or duly accredited (registered, legalized) separate subdivisions in Ukraine, including permanent missions and as of January 1, 2021, those who are not registered with the regulatory authorities are obliged to submit documents to the regulatory authorities for registering them within three months (until 03/31/2021) in the manner prescribed by paragraph 64.5 of Article 64 of the Tax Code of Ukraine.
So, paragraph 64.5 of Article 64 of the Tax Code of Ukraine provides that non-residents (foreign legal companies, organizations) operating in Ukraine through separate divisions, including permanent missions, or acquire real estate or obtain property rights to such property in Ukraine, or open accounts in banks of Ukraine in accordance with Article 6 of the Law of Ukraine "On Payment Systems and Transfer of Funds in Ukraine", or acquire ownership of an investment asset, defined by paragraphs three to six of subparagraph "e" of subparagraph 141.4.1 of paragraph 141.4 of Article 141 of the Tax Code Ukraine, another non-resident who does not have a permanent establishment in Ukraine must register with the regulatory authorities.
In turn, in accordance with the provisions of clause 133.3 of Article 133 of the Tax Code of Ukraine, a non-resident becomes registered with the supervisory authority at the location of his permanent representative office prior to the commencement of his economic activity through such a representative office in the manner established by the central executive authority, which ensures the formation and implements the state financial politics. A non-resident who started a business through his permanent establishment before registering with a supervisory authority is considered tax evader, and the profits received by him are considered hidden from taxation.
At the same time, if non-residents (foreign legal companies, organizations), their separate subdivisions, including permanent missions on the territory of Ukraine, do not carry out any activity, then they are not obliged to register with the regulatory authorities.
The current legislation, from July 1, 2021, grants the tax authorities the right to conduct inspections of non-residents (foreign companies, organizations) carrying out economic activities on the territory of Ukraine and who should have been registered in the manner prescribed by paragraph 64.5 of Article 64 of the Tax Code of Ukraine, and who are not the requirements for registration with regulatory authorities were fulfilled.
Please note that clause 117.4 of Article 117 of the Tax Code of Ukraine provides that the conduct by a non-resident (foreign legal company, organization) of activities through a separate subdivision, including a permanent establishment, without tax registration in the manner prescribed by this Code entails imposition of a fine on a non-resident in the amount of UAH 100,000.
Also, if a non-resident starts and / or carries out economic activities through a permanent establishment on the territory of Ukraine without tax registration, which is confirmed by an inspection report of the controlling body, then an administrative seizure of property may be applied to him.
If you do not have time or inspiration to delve into the nuances of the Tax Code of Ukraine, then Dynasty Law & Investment tax law specialists will help you to understand any issue, as well as protect your interests during a tax audit, appeal against fines, arrests.
Lawyer @ Dynasty Law & Investment, Hyrov Kostyantin.