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Are digital and IT services subject to VAT?
Are digital and IT services subject to VAT?
A resident company registered for VAT provides digital design, IT technical support, data processing, and similar services to a non-resident legal entity. Do these services fall under Article 168.1.5 of the Tax Code? How should VAT be calculated in this case?
According to the State Tax Service under the Ministry of Economy, Article 159.1 of the Tax Code states that the supply of goods, performance of work, and provision of services are subject to VAT. For the services specified in Article 168.1.5 of the Tax Code, the place of supply for VAT purposes is considered to be the location or place of registration of the recipient of the services.
In response to the inquiry, it was clarified that when a resident company provides consulting, advertising, and other similar services specified in Article 168.1.5 of the Tax Code, as well as services delivered through computers, the internet, and other electronic networks, to a non-resident, such transactions are regarded as an export of services and are subject to VAT at a 0% (zero-rate) VAT rate.
Legal basis: Article 168.1.5 of the Tax Code.
A resident company registered for VAT provides digital design, IT technical support, data processing, and similar services to a non-resident legal entity. Do these services fall under Article 168.1.5 of the Tax Code? How should VAT be calculated in this case?
According to the State Tax Service under the Ministry of Economy, Article 159.1 of the Tax Code states that the supply of goods, performance of work, and provision of services are subject to VAT. For the services specified in Article 168.1.5 of the Tax Code, the place of supply for VAT purposes is considered to be the location or place of registration of the recipient of the services.
In response to the inquiry, it was clarified that when a resident company provides consulting, advertising, and other similar services specified in Article 168.1.5 of the Tax Code, as well as services delivered through computers, the internet, and other electronic networks, to a non-resident, such transactions are regarded as an export of services and are subject to VAT at a 0% (zero-rate) VAT rate.
Legal basis: Article 168.1.5 of the Tax Code.