LETTER OF STATE TAX ADMINISTRATION OF UKRAINE

of July 28, 2011 No. 20450/7/16-1517-26

The State Tax Administration of Ukraine considered the letter concerning procedure for the taxation of intermediary services which are provided by the nonresident, and reports.

According to the subitem "b" of Item 185.1 of Article 185 of the Section V of the Tax code of Ukraine (further - the Code) the taxation object the value added tax are transactions of taxpayers on delivery of services which place of delivery is located on customs area of Ukraine, according to article 186 of the Code.

According to Item 186.4 of Article 186 of the Section V of the Code the place of delivery of services is the place of registration of the supplier, except the transactions specified in Items 186.2 and 186.3 of this Article.

Considering that the services provided by the nonresident (agent) according to the agency agreement which were specified in the address, are not determined by Items 186.2 and 186.3 of article 186 of the Tax Code of Ukraine, according to Item 186.4 of article 186 of the Tax Code of Ukraine the place of delivery of such services is the place of registration of the nonresident (agent), that is outside customs area of Ukraine.

Thus, the taxation object the value added tax of agency fee of the nonresident is absent in connection with delivery of services which place of delivery is outside customs area of Ukraine.

According to Item 160.1 of Article 160 of the Section III of the Code any income received by the nonresident with source of their origin from Ukraine is assessed with tax according to the procedure and at the rates determined by this Article.

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