Withdrawal of the income tax payer designation in respect of a separate subdivision of a non-resident

How is the income tax payer designation withdrawn from a separate subdivision of a non-resident (representative office, branch, etc.) after the non-resident is registered as an income tax payer?

According to clause 60 of subsection 10 of section. XX "Transitional Provisions" of the TCU, non-residents (foreign companies, organizations) that carry out economic activities in Ukraine and/or which, before the entry into force of the Law of Ukraine No. 466-IX "On Amendments to the Tax Code of Ukraine on Improving Tax Administration, Eliminating Technical and Logical Inconsistencies in Tax Legislation" of January 16, 2020 (hereinafter - the Law), have duly accredited (registered, legalized) separate subdivisions, including permanent establishments, in Ukraine, and as of 01.01.2021 are not registered with the controlling authorities, are obliged to submit documents to the controlling authorities within three months to register them in accordance with the procedure established by clause 64.5 of the TCU.

Clause 60 of Subsection 10 of Section XX "Transitional Provisions" of the TCU and Section V of the Procedure for Registration of Taxpayers and Duties, approved by Order of the Ministry of Finance No. 1588 dated 09.12.2011 (hereinafter - Procedure No. 1588), set forth the grounds and procedure for deregistration of the income tax payer.

Permanent establishments of non-residents that were registered as taxpayers (including corporate income tax) in the periods prior to January 1, 2021, remain taxpayers of such taxes in accordance with the requirements of the Tax Code for registration as taxpayers (including corporate income tax) of the respective non-residents.

Therefore, the income tax payer status of a permanent establishment of a non-resident is removed after the non-resident is registered as an income tax payer.

The permanent establishment is not required to submit an application for the removal of such a characteristic. The controlling authority removes the income tax payer designation from a permanent establishment simultaneously with the introduction of the income tax payer designation for the relevant foreign company.

If a foreign company and its permanent establishment registered as a CPT payer are registered with different supervisory authorities, the supervisory authority shall deregister the permanent establishment after receiving information on the registration of the foreign company as a CPT payer from another supervisory authority (where the foreign company is registered as a CPT payer), from the permanent establishment or on the basis of data from the register of non-resident taxpayers.

After the income tax payer designation is removed, the separate subdivision remains registered as a payer of other types of taxes until its termination.

A separate subdivision, for example, may be a tax agent for personal income tax, military duty, and a payer of a single contribution to the obligatory state social insurance.