Tax Code Establishes Rules for Foreign E-residents

On April 1, Law No. 2654-IX “On Amendments to the Tax Code of Ukraine and Some Other Laws of Ukraine Regarding Peculiarities of Taxation of Business Activities of Electronic Residents” to the Law “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations”, which introduces amendments to the Tax Code of Ukraine in the field of state registration of the above-mentioned persons by electronic means.

New Concepts

Electronic resident (e-resident) is a foreigner who has reached the age of 18, is not a tax resident of Ukraine, has received the appropriate qualified electronic trust services and whose information is entered into the “E-resident” information system.

“E-resident” is an information system that is a component of the Unified state web portal of electronic services, which collects, accumulates, processes, protects, records and provides information about the e-resident.

A foreigner has the right to acquire the status of e-resident after they submit an application for acquiring the status of e-resident and their identification through the “E-resident” information system.

The following persons cannot be e-residents:

– citizens of Ukraine;

– foreigners who have the right to permanent residence in Ukraine or are tax residents of Ukraine;

– stateless persons;

– persons who receive income with a source of origin from Ukraine for goods, works, services (except for passive income);

– persons who are citizens (subjects), residents or persons whose permanent residence (dwelling, registration) are states (jurisdictions) not included in the list of states whose citizens or residents can acquire the status of electronic resident (e-resident).

Registration of E-residents

For state registration as an individual entrepreneur, an e-resident applies in electronic form using the Unified State Web Portal of Electronic Services in accordance with the procedure determined by the Ministry of Justice of Ukraine and the central executive body, which ensures the formation and implementation of state policy in the field of providing electronic and administrative services; the application is signed with a qualified electronic signature. The document certifying the identity of an electronic resident is a passport document for traveling abroad.

In the application, the applicant may indicate the option of registering themselves as a value-added tax payer and/or according to the simplified taxation system.

Registration of e-residents by payers of the single tax of the third group is carried out by the controlling body within two working days from the date of receipt of information on the registration of the e-resident from the state registrar.

Taxation of E-residents

Taxation of e-residents is carried out at the rates set forth in Article 293 of the Tax Code.

According to Article 253.9, single tax payers of the third group – e-residents pay a single tax within 10 calendar days after the deadline for submitting a tax return for the tax (reporting) quarter.

For the payer of the single tax of the third group – e-resident, the tax agent is the bank in which the e-resident has a current account.

Law No. 2654-IX