The State Tax Service of Ukraine (hereinafter – the STS) has clarified provisions of the Tax code of Ukraine.

On its opinion, value added tax benefits for the software industry, which are implemented form 01/01/2013 to 01/01/2023, are not a subject of information services rendering transactions exempt from taxation  .

The Letter of the STS dated March 3, 2013 № 3360/6/15-3115 clarified the relevant position.

In particular, the STS pointed that software product is the result of computer programming in the form of an operating system, software, and etc. While rendering services on designing, publishing, programming, testing, installation, implementation and maintenance of software cannot be deemed as software products.

Thus, the Letter actually drops the software production benefits. In such cases legal formalization of programming services into delivery of their results can be considered as a possible way of tax optimization.