Hetmantsev’s “Google tax” has reached GPT chat: starting from the new year, the subscription price will increase by 20%
29 November 12:14
Starting from January 1, 2025, Ukrainian subscribers of the premium version of ChatGPT will pay 20% more than before. OpenAI announced this in a letter to its Ukrainian subscribers.
As it is known, one of the initiatives of the head of the Verkhovna Rada Tax Committee Danylo Hetmantsev, supported by lawmakers, is to impose a tax on non-resident companies that provide digital services in the country.
However, as usual, the end user will pay for the tax increase proposed by Hetmantsev. In particular, ChatGPT chat has already informed its Ukrainian subscribers that the cost of their subscription will actually increase by 20% starting January 1.
“We would like to inform you about the introduction of value added tax (VAT) in your invoice, which will be implemented on January 1, 2025… If you are registered as a VAT payer in Ukraine and have a valid VAT identification number, please provide it in the Tax Status and Identification Number section of your OpenAl account. If you do not provide a valid taxpayer identification number by January 1, we will have to charge and collect 20% VAT on your invoice,”
– openAI said in a letter to its subscribers.
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What is the “Google tax”?
The official title of the law on the “Google tax” is “On Amendments to the Tax Code of Ukraine on the Abolition of Taxation of Income Received by Non-Residents in the Form of Payment for the Production and/or Distribution of Advertising and Improvement of the Procedure for Taxation of Value Added Tax on Transactions for the Supply of Electronic Services to Individuals by Non-Residents.” It was adopted on June 3, 2021, and came into force on January 1, 2022.
The law applies to large companies that are not residents of Ukraine, do not have a permanent establishment here, and yet provide electronic services to individuals (i.e. ordinary Ukrainians) and individual entrepreneurs via the Internet. Therefore, a conventional Netflix, where Ukrainians watch movies, or Facebook, whose advertising account is used by an entrepreneur, are subject to the law.
According to the new law, these companies had to register as VAT payers if the amount of services they provided to Ukrainians exceeded one million hryvnias per year.
