Menu
  • Locations
  • About Us
  • Services
  • Experts
  • News & Knowledge
  • Hot Topics
  • Culture & Career
  • Locations
  • Search
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
  • Albania
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Chile
  • China
  • Colombia
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • Saudi Arabia
  • Senegal
  • Serbia
  • Seychelles
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
  • Sustainability & Tax at WTS Global
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & Tax
  • Tax Certainty & Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
  • Real Estate
  • Digital Tax Law
  • European Tax Law
  • Latest News
  • Brochures
  • Newsletters
  • Surveys & Studies
  • Pillar Two
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
  • Pillar Two Team
  • Pillar Two - Implementation Status Wordwide
  • Press
  • Events & Webinars
  • CI Guide
  • Contact
WTS worldwide
  • Albania
  • Algeria
  • Angola
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Bangladesh
  • Belarus
  • Belgium
  • Benin
  • Bolivia
  • Bosnia & Herzegovina
  • Botswana
  • Brazil
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Cape Verde
  • Chile
  • China
  • Colombia
  • Congo Brazzaville
  • Costa Rica
  • Croatia
  • Cyprus
  • Czech Republic
  • Democratic Republic of Congo
  • Denmark
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Equatorial Guinea
  • Estonia
  • Ethiopia
  • Finland
  • France
  • Gabon
  • Gambia
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Guatemala
  • Guinea
  • Honduras
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iran
  • Iraq
  • Ireland
  • Israel
  • Italy
  • Ivory Coast
  • Japan
  • Kazakhstan
  • Kenya
  • Korea
  • Kyrgyzstan
  • Laos
  • Latvia
  • Libya
  • Lithuania
  • Luxembourg
  • Macao
  • Macedonia
  • Madagascar
  • Malawi
  • Malaysia
  • Mali
  • Malta
  • Mauritius
  • Mexico
  • Moldova
  • Mongolia
  • Montenegro
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nepal
  • Netherlands
  • New Zealand
  • Niger
  • Nigeria
  • Norway
  • Pakistan
  • Panama
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Romania
  • Russia
  • Rwanda
  • São Tomé and Príncipe
  • Saudi Arabia
  • Senegal
  • Serbia
  • Singapore
  • Slovakia
  • Slovenia
  • Somalia
  • South Africa
  • South Sudan
  • Spain
  • Sri Lanka
  • Sudan
  • Sweden
  • Switzerland
  • Taiwan
  • Tanzania
  • Thailand
  • Togo
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • Uruguay
  • USA
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • About Us
    About Us

    Here you will find more information on our organization’s structure, experts and global reach.

    Read more
    About Us Our CEO Our Board Our Global Executive Team Quality, Process & Risk Management
    Sustainability & Tax at WTS Global
  • Services
    Services

    Learn more about our network partners and their services.

    Read more
    Corporate Tax Customs Financial Services Global Mobility Indirect Tax
    International Corporate Tax Mergers & Acquisitions (M&A) Private Clients & Family Office Sustainability & Tax Tax Certainty & Controversy
    Tax Technology Transfer Pricing & Valuation Real Estate Digital Tax Law European Tax Law
  • Experts
    Experts

    With a representation in over 100 countries, our team offers local expertise on a global scale. Learn more about our experts.

    Read more
  • News & Knowledge
    News & Knowledge

    Welcome to WTS Global Insights. Here you will find news and updates from our worldwide network.

    Read more Newsletter Subscription
    Latest News Brochures Newsletters Surveys & Studies
  • Hot Topics
    Hot Topics

    Overview of the current "Hot Topics" in the tax industry and how we can support with individual questions.

    Read more
    Pillar Two
  • Culture & Career
    Culture & Career
    Read more
    Culture and Leadership Diversity WTS Global Academy Career Your Development
    Jobs
  • Locations
  • Search
07.12.2018

Ukraine: VAT exemption for supply of software products

To maintain the competitiveness of domestic software developers tax benefits for transactions on supply of software products were introduced

Supply of IT services and software products is the most rapidly developing economic sphere in the world and, in particular, in Ukraine. In 2017, Ukraine was recognized as the best country to provide IT outsourcing services1 , with a total export volume of approximately USD 3.6 billion (third place in contribution to the GDP of Ukraine after agriculture and metallurgy).

Considering the high level of competition on the world market of software development, the Ukrainian government introduced a few tax benefits for transactions on supply of software products to maintain the competitiveness of domestic software developers.

According to the provisions of the Tax Code of Ukraine, the supply of software products as well as transactions with software products for which the payment is not deemed to be royalties are temporarily VAT exempt until the end of 2022. This exemption does not cover transactions on the transfer of software rights, payments for which are considered as royalties, as such transactions are VAT-exempt under the general rule.

Taking into account that software products are constantly changing and evolving, in order to apply the above VAT exemption, it is necessary to understand what is included in “software products”. Based on the definition given in the Tax Code itself, “software products” include the results of computer programming in the form of operating systems, computer programs or their components, any changes, updates, add-ons for computer programs, websites, cloud-based services, as well as cryptographic information security tools.

As no questions usually arise when it comes to the supply of operating systems or computer programs, some problems may still appear in case of the supply of cloud-based services. Local tax authorities further explain that the supply of cloud-based services is VAT-exempt when the customer gets the right to use the software as an end-user for its own purposes (e.g., storage of data or online accounting services). Whereas the mere provision of information or specific data with the use of cloud-based services without granting the customer actual access to the software itself will not entitle software suppliers to apply the VAT exemption.

Another issue that may arise is that contracts between software suppliers and their customers are not always limited to the supply of software products but also include the provision of support-related and other accompanying services. If such accompanying services are indistinguishably linked to the software products and included in their price (e.g., installation, setup, testing, fixing bugs, etc.), they are also exempt from VAT. But in cases when accompanying services are not included in the price of software products and/or provide for further technical assistance in the course of the use of the software, such services are not considered VAT-exempt. In the latter case, the supply of software products and the supply of accompanying services must be split in the contract and regarded as separate transactions, one of which will be VAT-exempt and the other not.

In order to avoid any mistakes with accruing and paying VAT for transactions on the supply of software products, the parties should thoroughly stipulate the contractual terms, determine whether the supplied software products and accompanying services are covered by the VAT exemption and split the contract if at least one of the transactions within its framework is VATable.

1 According to the data provided by Global Sourcing Association

Article published in WTS Global VAT Newsletter Q4/2018
Recent or expected changes in VAT and GST regulations and compliance duties in various EU and third countries
View publication
Newsletter Global VAT

The Global VAT Newsletter focuses on changes in compliance duties in various EU and non-EU countries

Subscribe now
Articles you might be interested in

We are thrilled to share with you the latest issue of Pillar Two - Implementation Status Overview Worldwide!

Pillar Two: Updates September 2023
Read more

The donation will provide 120 girls in rural government schools with a year's supply of sanitary products. This will assist in addressing the Period Poverty plaguing them. 

WTS Nobisfields, Ghana - a member firm of WTS Global, Donates to "Hope For That Child"
Read more

Ministry of Finance and State Taxation Administration has won praise from individuals at work, foreign and Chinese, by announcing in one breathe a four-year extension to three set of soon-expiring employee-favored individual income tax policies, postponing their expiry date to the end of 2027.

China extends multiple personal tax benefits to 2027
Read more

Get in contact

If you have any questions about WTS Global or our global services, please get in touch.
We will respond to you as soon as possible.

Contact
About Us
  • About Us
  • Our CEO
  • Our Board
  • Our Global Executive Team
  • Quality, Process & Risk Management
Services
  • Corporate Tax
  • Customs
  • Financial Services
  • Global Mobility
  • Indirect Tax
  • International Corporate Tax
  • Mergers & Acquisitions (M&A)
  • Private Clients & Family Office
  • Sustainability & Tax
  • Tax Certainty & Controversy
  • Tax Technology
  • Transfer Pricing & Valuation
Latest News
  • News & Knowledge
  • Brochures
  • Newsletters
  • Newsletter Subscription
  • Surveys & Studies
Hot Topics
  • Pillar Two
  • Digital Tax Law
  • European Tax Law
Culture & Career
  • Culture and Leadership
  • Diversity
  • WTS Global Academy
  • Career
  • Your Development
  • Jobs
Exclusive Cooperation With
© 2023 WTS Company Information Data Protection Disclaimer