On 20 November 2019, the State Financial Service (SFS) of Ukraine has issued guidance letter no. 1237/6/99-00-07-02-02-15/IPK regarding taxation of freight forwarding services.
The letter clarified that the amount of freight paid by a resident to a non-resident under the freight contracts is subject to at a rate of 6% withholding tax. Transport service funds paid by a client to a freight forwarder’s account which are then transferred to a third party under the contract aren’t recognized as income. Moreover, if the non-resident freight forwarder carries out the carriage of goods using own vehicle, in this case the freight services are considered as freight forwarding tax.
