Bill No. 15111-d, adopted in first reading yesterday, on taxation of income of people who cooperate with digital platforms, has already made a lot of noise, but it seems that we still do not fully understand its depth :)
Bill No. 15111-d, adopted in first reading yesterday, on taxation of income of people who cooperate with digital platforms, has already made a lot of noise, but it seems that we still do not fully understand its depth :)
The media mainly discusses platforms that provide services for selling goods (OLX, Prom, Rozetka), taxis (Bolt, Uklon, Uber), and food delivery (Glovo).
But in reality, the law will apply to a much larger number of business segments.
First, we should immediately mention startups that provide tutoring services (Preply is a good example), training, psychological support (Mindly, BUKI), medical support (Helsi — online doctors), etc.
The same goes for OnlyFans — also here. We recently wrote that content creators on OnlyFans managed to appeal fines from the State Tax Service in court in 27 cases out of 94. One of the models got rid of a fine of 3 million UAH.
Why are models still winning at the Tax Office?
It’s simple. So far, there is no clear mechanism for obtaining data on their income on an international platform. The State Tax Service appealed to letters from the British tax office regarding payments from Fenix International Ltd, which manages OnlyFans. But the courts decided that this letter is a reason for an inspection, but not confirmation of income. Such confirmation can be bank statements, contracts, etc.
With the advent of the new law, this gap will disappear. After all, such a concept as DPI comes into force — the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived Through Digital Platforms (DPI MCAA).
To put it simply, the data that Podatkova receives from the international platform will already have weight. And courts can consider such cases (and evidence) in a completely different way.
Let’s move on. Upwork or similar services for freelance work for IT professionals. The new provisions of the law also apply to these platforms.
De facto, the law pushes the freelancer to either open an individual entrepreneur or pay 5% of income. The platform itself in this case will act as a tax agent for the IT freelancer (as well as a glover, tutor, psychologist, teacher, model, driver, OLX) and will report to the State Tax Service.
If you sell goods or services for an amount not exceeding 2000 Euros per year, this income is not included in taxable income. That is, this is the lower limit up to which you can, for example, sell used things on OLX.
There is also an upper limit — annual income must not exceed 834 times the minimum wage (approximately 7.2 million hryvnias).
That is, the reform brings platform users as close as possible to the conditions of ordinary sole proprietors. I would even say that the conditions for sole proprietors are worse, because they also have to pay military duty and social security contributions.
One can argue for a long time that the Rada will impose an additional tax burden on people this year if it adopts this law in the second reading.
But if you look at the situation from the platform’s side, it might even be easier for them to work with these innovations. The same Tax Service won’t come to visit them and pressure the platform to hand over user data (and this definitely happens).
If the Tax Office presses on and the data on the same freelancers ends up in her hands, letters of happiness will arrive to the performers of various services very quickly. And the trials will begin.
So maybe 5% is better?
