GOOGLE TAX?
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On February 17, the Verkhovna Rada passed in the first reading the bill № 4184, which proposes to introduce value added tax (VAT) for foreign companies providing electronic services to Ukrainians.
This household tax is called the 'Google tax'. And such a name was not invented in Ukraine. For example, in Germany, the 'Google tax' began to be introduced in 2012. According to Danilo Hetmantsev, chairman of the Verkhovna Rada's tax committee, from the parliamentary rostrum, more than 80 countries currently have such or similar taxes. Although in different countries it has its own characteristics.
What will change if this bill comes into force? Why is this important for Ukrainians?
What exactly is taxed
The changes may directly affect all Ukrainians who use the Internet. Bill № 4184 is entitled: 'On Amendments to the Tax Code of Ukraine to ... improve the procedure for value added tax on transactions for the supply of electronic services by non-residents to individuals.'
What transactions are proposed to be taxed? The bill lists the following types of electronic services:
providing images or texts via the Internet, including photographs, e-books and magazines;
supply of audiovisual works, video to order, games, gambling and services for their participation;
providing access to information, commercial, educational and entertainment electronic resources;
providing cloud technologies for data placement;
supply and maintenance of software and electronic equipment;
advertising services on the Internet, mobile applications, etc.
Electronic services do not include:
services ordered online but provided 'physically', ie online;
supply of software and computer games on physical media;
E-mail consultations;
Internet access services.
Simply put, they plan to charge VAT on all content for which Ukrainians pay money today.
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