Website design services are subject of VAT and profit taxation
State tax service by letter № 2735 / О / 99-99-19-03-02-14 explained the features of taxation of website design provided by a non-resident to a resident outside the customs territory of Ukraine. It means that the tax is not considered a classic situation where IT outsourcing services company providing web design front end or abroad, but rather when Ukrainian company buys design services from abroad.
Subject to VAT is a transaction tax payers to supply services delivery location which is located in the customs territory of Ukraine, according to Art. 186 of Tax code of Ukraine.
Under the provisions of paragraphs. 141.4.1 n. 141.4 Art. 141 Tax code of Ukraineany revenues received by non-residents from sources in Ukraine, subject to income tax in the manner and at the rates specified p. 141.4 st.141 of Tax code of Ukraine.
Under the provisions of paragraph “ї” claims. 141.4.1 n. 141.4 Art. 141 Tax code of Ukraine is not considered income received by non-residents from sources in Ukraine, which is subject to the procedure and at the rates specified p. 141.4 Art. 141 Tax code of Ukraine, income from earnings or other compensation for goods, works, services, transmitted, made, granted to residents of such non-resident (permanent establishment), including the cost of services of international communications or international information security.
State fiscal service noted that according to the claims. 141.4.6 n. 141.4 st.141 of Tax code of Ukraine residents, non-residents who pay for advertising (production or distribution), also during that must pay income tax (20% off) at their own expense.