Payment by a corporate card for services: FACEBOOK, UBER, GOOGLE (non-VAT payers)
Not so long ago, the NBU allowed to pay with a corporate card for advertising on Facebook, GOOGLE, Uber, Booking services.
Let’s start with the fact that: indeed, since 04/04/2019, there are no restrictions as such on conducting transactions from the accounts of business entities using a corporate card (PDA). Only in the case of settlements with a non-resident – within one operating day under one foreign economic agreement, you can pay with a PDA for a small amount. An insignificant amount is an amount that does not exceed the equivalent of UAH 150 thousand. The recalculation is carried out at the NBU rate as of the date of the currency transaction.
Therefore, if the payment limit is 150 thousand UAH. per day is respected, then payment for the services of non-residents with a PDA will fit into the legislative framework.
At the same time, it should be noted that when making payments using a PDA, money is considered issued against a report (as soon as payments for goods / services are made using a PDA). Therefore, the authorized person submits an advance report for the money spent from the card;
2) in case of receiving services from a non-resident, if the place of delivery of such services is located in the customs territory of Ukraine, the person responsible for paying VAT on such services is the resident – the recipient of the services (clause 180.2 of the TCU). Moreover, the recipient of the services – the non-payer of VAT must also pay VAT (Article 208 of the Tax Code).
At the same time, only residents-legal entities are required to formally pay VAT “for a non-resident” based on clause 208.1 of the Tax Code. But the fiscal authorities have repeatedly stated that individual entrepreneurs who do not pay VAT should also pay VAT when receiving services from a non-resident.
So, a non-payer of this tax must pay “non-resident” VAT, provided that:
(1) the service was provided by a non-resident or a non-resident permanent establishment not registered as a VAT payer;
(2) the place of delivery of the services received is the territory of Ukraine.
Therefore, let’s find out if the advertising services of Facebook, GOOGLE, Uber, Booking will be services, upon receipt of which the VAT defaulter will need to independently calculate and pay VAT?
Facebook advertising services. It should be noted that Facebook is a non-resident that does not have a registered office in Ukraine. That is, receiving advertising services from Facebook is pure import of services. It remains only to determine where the place of delivery of such services is located: in the customs territory of Ukraine or not.
The place of delivery of advertising services is determined by clauses “B” clause 186.3 of the NKU – at the place of registration of the customer. Since the customer is a resident, the place of delivery is the territory of Ukraine. This means that, upon receipt of such services, even a non-VAT payer will have to pay VAT and, accordingly, submit a “non-resident” VAT calculation.
At the same time, one should also not forget about the income tax of a non-resident. As provided in clauses 141.4.6 TCU, residents who make payments to non-residents for the production and / or distribution of advertising, during such payment are required to pay tax at the rate of 20% of the amount of such payments at their own expense. Therefore, when using a PDA to pay advertising fees to a non-resident, the legal entity / entrepreneur must simultaneously pay tax on non-resident income at the rate of 20% of the amount paid for advertising.
The only thing, we note, that regarding the payment of PDA advertising in social networks, an even fresh explanation of the fiscal authorities appeared – the Office of Large Payers of the State Fiscal Service. With regard to confirmation of expenses, the fiscal authorities note that confirmation of the expenditure of funds when purchasing services on foreign Internet sites will be the statement of the bank that issued the payment card with which the payments were made, and the corresponding receipt from the service provider. In other words, the fiscal authorities agree that a receipt with detailed information about the transactions carried out through the company’s Facebook account can serve as a substitute for the act of performed services. But for reinsurance, you can arm yourself with additional documents.
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