Invoicing and Tax regulation in Ukraine

Navigating Ukraine’s evolving e-invoicing and tax regulations can be challenging. This guide provides an overview of the latest requirements to help you stay compliant and avoid potential penalties.

In the guide, we will cover:

Regulations Timeline

Ukrainian E-invoicing Requirements (2024 Update)

Tax Regulations

Digital Reporting

Penalties

Achieving Global Invoicing and Tax Compliance with Space Invoices

 

Regulations Timeline

A quick overview of all current and upcoming regulations that Ukraine mandates regarding e-invoicing and digital reporting. For more details, check out the sections below.

Regulations in Effect:

Mandatory e-invoicing for all B2G transactions,

Mandatory e-invoicing for all B2B and B2C companies with an annual threshold above UAH 1 million.

Upcoming Changes to Ukrainian E-invoicing:

1st January 2025: SAF-T becomes mandatory for large taxpayers in Ukraine;

1st January 2027: SAF-T becomes mandatory for all taxpayers in Ukraine.

 

Ukrainian E-invoicing Requirements (2024 Update)

In Ukraine, current regulations mandate e-invoicing for all companies with a yearly revenue over UAH 1 million, including B2G, B2B, and B2C transactions. While e-invoicing remains optional for other companies, many Ukrainian businesses have already proactively adopted this technology. The benefits of e-invoicing include improved operational efficiency, faster payment processing, better compliance with tax regulations, and significant cost savings.

To support this transition, Ukraine has implemented:

The PEPPOL network,

Public procurement managed by the ProZorro e-procurement system, and

General e-invoicing managed by the Unified Register of Tax Invoices (URTI).

Governmental Body Responsible for E-invoicing

The State Tax Service of Ukraine is responsible for e-invoicing regulations.

Click here to visit their official website.

E-invoicing Formats

In Ukraine, e-invoices are typically exchanged using the XML format, usually in either Universal Business Language (UBL) or PEPPOL BIS Billing 3.0. There is no central hub or platform; instead, businesses connect to the Unified Register of Tax Invoices (URTI). They utilize e-invoicing networks like PEPPOL and reliable access point providers such as Space Invoices to ensure compliance.

E-invoice Requirements

Invoices must be issued for every transaction that involves the sale of goods or services. They can be issued in either electronic or paper form and must include the following components:

Seller's Information: Name, address, taxpayer identification number (TIN);

Invoice Date;

Invoice Number;

Description of Goods/Services: Detailed description, including quantity and unit price;

Total Amount: Including applicable taxes;

Tax Details;

Payment Terms.

Certain transactions may require additional information:

B2B Transactions:

B2C Transactions:

Simplified Invoices Include:

 

Tax Regulations

Value Added Tax (VAT)

The standard VAT rate in Ukraine is 20% and applies to most transactions, while the 14% rate applies to certain agricultural products. The reduced, 7% rate applies to qualifying medicines, medical goods, and specific services.

Corporate Tax

The standard corporate tax rate in Ukraine is 18%. There is an increased rate of 25% from 2024, which only applies to banks.

VAT on Digital Services in Ukraine

Digital services in Ukraine are generally subject to a 20% VAT. However, foreign companies selling digital services to Ukrainian consumers have some extra regulations:

They are required to register for VAT purposes with the State Tax Service of Ukraine if their annual turnover from these services exceeds 1 million UAH.

B2C Transactions: The VAT must be collected at the time of sale, it must be charged on the sale price, and it must be remitted to the Ukrainian tax authorities.

Digital services that are subject to VAT include e-books, software downloads, music, movies, games, and other electronically supplied services.

 

Digital Reporting

Ukraine has already introduced several digital reporting requirements, with more to come:

B2G e-invoicing is required for all companies.

B2B and B2C e-invoicing is mandatory for companies with revenues above UAH 1 million.

SAF-T will become mandatory for large taxpayers in Ukraine (2025-2027).

VAT Registration and Thresholds

Ukrainian businesses must register for VAT if their taxable supplies exceed UAH 1,000,000 within any consecutive 12 months.

Foreign businesses supplying electronic services to Ukrainian consumers are also subject to the UAH 1,000,000 threshold.

VAT Returns and Payments

The reporting frequencies are as follows:

Monthly Reporting: Must be submitted by the 20th day of the month following the reporting period.

Quarterly Reporting: Certain taxpayers, such as newly established businesses, agricultural producers, and those with an annual income of UAH 40 million or less in the prior year, may file VAT returns quarterly. These returns are due within 40 calendar days after the end of the reporting quarter.

Annual Reporting: Certain taxpayers, including qualified agricultural manufacturers, have a reporting deadline of 60 calendar days after the end of the reporting year.

 

Penalties

Late Registration Penalty for Zero-Rate Invoices: Violations of registration deadlines for tax invoices taxed at a zero rate result in fines of 2% of the supply volume, up to a maximum of UAH 1,020.

SAF-T UA Filing Penalties: For non-submission and violation of the SAF-T UA filing procedure, penalties are:

Late Registration of Tax Invoices: Failing to register tax invoices on time can result in fines. For zero-rate tax invoices, the fine is 2% of the supply volume (excluding VAT), capped at UAH 1,020.

Failure to Register as a VAT Payer: Non-resident suppliers of digital services who fail to register for VAT in Ukraine may incur additional VAT liabilities based on digital service supplies, along with a tax penalty of 30 minimum wages.

 

Achieving Global Invoicing and Tax Compliance with Space Invoices

One way to comply with (e-)invoicing, tax, and reporting regulations in Ukraine is to use a provider like Space Invoices.

You will be able to:

Use one API for current and future global tax and invoicing compliance, including Ukraine

Save time and money with integration that takes less than a week

Support and upsell your clients worldwide, including Ukraine

Ensure all documents are archived and successfully reported to responsible institutions

Become a one-stop shop for current and future clients

Streamline processes and eliminate manual errors, saving time and money

Do you have questions about achieving compliance in Ukraine?

We are ready to help.

 

The information in this guide is strictly informative, as regulations and timelines change frequently. While we make every effort to monitor updates and maintain the accuracy of our content, we recommend consulting with a tax professional or e-invoicing specialist for the most reliable and personalized advice. This guide was last updated on October 31, 2024.

Looking to automate real-time reporting and tax compliance for Ukraine? Let's talk