MP Hetmantsev / Photo from UNIAN
The relevant draft law is being developed in the Verkhovna Rada, Ukraine's parliament.
Head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, lawmaker from the ruling Sluha Narodu (Servant of the People) Party Danylo Getmantsev says non-resident companies such as Google, Facebook, and Netflix will be obliged to pay value added tax (VAT) on electronic services they sell to Ukrainians.
He made the comment during an interview for the Ukrainian news outlet Hromadske on February 10.
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"The situation is that our advertisers have to pay VAT, while transnational giants are actually exempt from VAT for some reason. The situation is wrong, and we'll have to fix it. By the way, we met with [representatives of] Facebook and other large companies. They didn't mind paying this tax. Remote registration in e-offices, payments in foreign currency, and communication with our tax service in English. That is, everything that could be convenient for them to do and they could do it remotely," he said.
The relevant draft law is being developed in the Verkhovna Rada, as there are simply no tools in the legislation to "administer such an activity."
Asked whether companies like Google, Facebook, and Netflix could transfer this tax to a consumer, raising their rates, Getmantsev said: "Scientists have concluded that who is the actual taxpayer or to whom the taxation is transferred, does not depend on the tax formation of the legislator's intention, but on the specific situation in the market. That is, how supply and demand are related. If my product is not in demand, I pay this tax; otherwise, a consumer shall pay it."
Yet, Getmantsev assumes that certain services may become more expensive over this tax.