Another cash cow? OpenAI will pay taxes in Ukraine

OpenAI has informed Ukrainian users of the paid ChatGPT subscription that it will start charging VAT on its services from January 1, 2025.

What will OpenAI pay for?

• VAT on foreign services: The law obliges foreign Internet companies that provide electronic services in Ukraine to charge 20% VAT.
• User requirements: OpenAI urges users to update their accounts by adding a VAT identification number, if available.
• Financial impact: According to the State Tax Service of Ukraine, in the 3rd quarter of 2024, revenues from the “Google tax” amounted to over UAH 3.1 billion.

Law No. 1525-IX came into effect in July 2021, introducing VAT for foreign companies providing digital services such as advertising, subscriptions, and cloud technologies. Companies that already pay the tax include Google, Meta, Netflix, and others. will also join this list.

This summer, the Ukrainian government prepared a bill for everyone to consider, the main goal of which is to increase tax revenues to the budget by an additional 140 billion UAH.

In addition to raising taxes and military levies, another attempt to reduce the value of a parcel that is not subject to taxation has also been added to the list. Currently, Ukrainians can buy and import parcels from abroad worth up to 150 euros without paying customs duties and VAT. If the value of the parcel exceeds this limit, tax is paid on the value above this limit. Currently, Ukrainian officials are proposing to reduce the limit for tax-free import of parcels from abroad to 45 euros.

Now we are talking about importing goods into Ukraine with a total value of up to 45 euros for one recipient – an individual in one parcel from one sender – an individual. At the same time, such goods must be sent by the sender without any payment, be intended for personal or family use by the recipient, and their characteristics and quantity must not indicate importation for commercial purposes. So how a paid purchase on Aliexpress for more than 45 euros will fit into this scenario is a big question.

The provisions of this paragraph do not apply to excisable goods, perfumes in a volume of more than 50 g, toilet water in a volume of more than 0.25 l, coffee weighing more than 500 g and tea weighing more than 100 g.