LETTER OF THE STATE TAX SERVICE OF UKRAINE

of October 31, 2012 No. 4513/0/61-12/12-0016

About consideration of the letter

The State Tax Service of Ukraine considered your letter concerning the taxation of royalty which are paid for benefit of the nonresident, and reports the following.

According to provisions of item 160.1 of article 160 of the Tax Code of Ukraine (further - the Code) any income gained 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.

For the purposes of this Article it is necessary to understand as income gained by the nonresident with source of their origin from Ukraine, in particular, royalty (subitem "in" item 160.1 of article 160 of the Code).

According to provisions of item 160.2 of article 160 of the Code resident or permanent mission of the nonresident which perform for benefit of the nonresident or person authorized by it (except permanent mission of the nonresident in the territory of Ukraine) any payment from income with source of its origin from Ukraine gained by such nonresident from carrying out economic activity (including into accounts of the nonresident which are operated in national currency), except the income specified in Items 160.3 - 160.6 these Articles, shall hold tax on such income specified in Item 160.1 of this Article at the rate in the amount of 15 percent of their amount and at their expense which is paid to the budget during such payment if another is not provided by provisions of international treaties of Ukraine with the countries of the residence of persons for benefit of which payments which became effective are performed.

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