Inter alia, the new wording of the Tax Code establish:
- Comprehensive definition of the permanent establishment (PE) of non-residents, including additional new criteria for determining the status of a PE;
- Procedure of voluntary and obligatory registration of the non-residents with the tax authorities in Ukraine;
- Possibility for Ukrainian tax authorities to conduct the tax audits of non-residents` activity in Ukraine, recognize non-residents as Ukrainian CPT payers, charge 18% CPT and penalties.
Recently, the State Tax Service of Ukraine issued the clarification letter in which was expounded the following:
- Registered representative offices of non-residents still may define their CPT obligations using one of the three methods of income determination (including application of a 0,7 coefficient) for reporting for 2020. Starting 1 January 2021, the only possible method will be direct allocation of profits and losses with application of the arm`s length principle;
- Those non-residents which have representative offices registered as CPT payers are obliged to register themselves in tax authority as a CPT payer till 31 March 2021. After such registration of non-residents, CPT registration of their representative offices shall be canceled.
- Starting 1 July 2021, the tax authorities will be entitled to start the tax audits of the non-residents and their representative offices which have not fulfilled the registration and reporting requirements.
Please note, that despite the clarifications issued by the tax authorities, there are still a number of uncertainties in the area of taxation of non-residents and their representative offices in Ukraine.
If you believe that your transactions or company may be concerned by these new rules, please do not hesitate to contact Mazars` Ukraine tax specialist for assistance.
 Letter of the State Tax Service of Ukraine dated 27.01.2021 № 2367/7/99-00-21-02-01-07